Editor's note: This is the second in an occasional series of columns about the county budget process.
When looking at a local government budget, citizens focus on property taxes. But property taxes only represent a small portion of the overall picture. In the current Pasco County budget, property taxes represent just 16.5 percent of our revenue.
If you have been in the same homestead property since 1995 and have made no additions (swimming pool, additional bedroom, new enclosed deck) the county portion of your property taxes are lower for 2008 than they were in 1995 and significantly lower than in 2003. This is true even though your market value had increased in prior years. This is due to in large part to the Board of County Commissioners reducing or maintaining the general fund millage for the last eight years and the municipal fire millage for the last six years.
Property taxes are calculated by multiplying your home's taxable value by the millage. A mill equals $1 of tax for every $1,000 of taxable value. The taxable value of all properties is determined each year as of Jan. 1. The tax rates (millage) are set by each of the local governments. In Pasco County those governments are the County Commission, the Pasco School Board, the Mosquito Control District, the Southwest Florida Water Management District and their basin boards, and our six municipalities. For the vast majority of properties in the unincorporated portion of Pasco County, the combined millage this year is 14.4348.
Taxable value can be determined by taking the market value minus the Save Our Homes exemption to equal assessed value. That assessed value minus other exemptions equals the taxable value.
The Save Our Homes exemption was first applied in 1995. It limits the annual increase in assessed value to the cost of living not to exceed 3 percent. The increase over 15 years averaged 2.31 percent with the current year's rate being the lowest ever at 0.1 percent. When a property is sold, the assessed value is reset to equal the new market value. In the past this has led to homes with similar market values having widely different assessed values based on the length of time the property has been in Save Our Homes.
Until this year it was fairly easy to calculate most taxable values on homesteaded properties provided your home's assessed value was greater than $25,000. The formula was assessed value minus $25,000 equaled the taxable value.
The implementation of Amendment 1 brings two taxable values: One for school property taxes determined on the original $25,000 exemption and a second taxable value applied to all other millage from local governments. Amendment 1 provides a second $25,000 exemption for homesteads for that portion of the value between $50,000 and $75,000.
Here is a real world demonstration. Take a market value house at $248,794 minus a Save Our Homes exemption of $139,622 for an assessed value of $109,172. Subtract $25,000 to get a school taxable value of $83,672 and now apply the additional homestead exemption of $25,000 for a taxable value for all other governments of $58,672.
So the 2008 taxes for all government entities is $1,025.37. The same property in 2004 had a total property tax bill of $1,260.37. A combination of lower millage by all of the governments and the additional $25,000 homestead exemption from Amendment 1 resulted in an 18.6 percent reduction.
E-mail questions or comments to [email protected] Additional information may be found online at tinyurl.com/budget101.
Mike Nurrenbrock is director of the Pasco County Office of Management and Budget.