Fueled by new construction and rising home sales, the total value of taxable property around the Tampa Bay area is projected to grow 8 percent or more this year.
In Hillsborough County, that growth is expected to bring taxable values — that is, the total value of property minus homestead and other exemptions — back above 2008 levels for the first time since the precarious highs of the real estate bubble. Still, they remain under the precrash peak in 2007.
"The numbers over the past few years reflect a more healthy and sustainable real estate market," says Hillsborough Property Appraiser Bob Henriquez. "You see a slow and steady growth in value, rather than the fast runup in values that you saw before the Great Recession."
The outlook is even brighter for the Tampa Bay area's two biggest cities. The taxable value of property is expected to grow 9.4 percent in St. Petersburg and nearly 9.3 percent in Tampa.
Countywide in Hillsborough, Henriquez projects growth of about 8.8 percent in taxable value. In Pinellas and Pasco, the countywide increases are each about 8 percent.
The numbers are good news for local officials because growing values allow local governments to collect more revenue without raising property tax rates.
"It helps," Tampa Mayor Bob Buckhorn says. "Obviously, the increase in values translates to an increase in property tax revenues, something that we desperately need."
Tampa officials had expected an 8 percent increase. The higher-than-projected growth will add an estimated $1.2 million to the city's property tax revenues next year. Of that, $944,127 will be available for general spending such as police and fire services, which together cost more than all the money the city takes in through property taxes.
The rest will stay inside the city's community redevelopment areas, where money generated by new growth must be spent to support further growth.
Thanks to the Save Our Homes cap, assessments for homeowners can't grow more than 3 percent a year or the Consumer Price Index, whichever is lower. The cap doesn't apply to new construction, rentals, vacant land, hotels or commercial property.
Still, the numbers from Hillsborough show the cap takes more value off the books than new construction adds. Tampa, for example, has $623 million worth of new construction, but the cap takes nearly $6.6 billion worth of property value off the taxable rolls.
Moreover, local officials say they're planning to budget conservatively, partly because an expansion of the homestead exemption — something the Legislature plans to put on the 2018 ballot — could cut property tax revenues by millions of dollars. In Tampa, for example, an expanded exemption would be estimated to reduce property tax revenues by $6 million.
In Hillsborough County, where the expanded exemption could deliver a $30 million hit, county Administrator Mike Merrill has already frozen hiring, and commissioners have discussed raising the local gas tax or establishing a utilities tax to make up for cuts to property taxes.
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"It's going to get worse," Buckhorn says. "You have the looming specter of the additional homestead exemption. We are assuming that if it's on the ballot that it will pass, so we've got to budget for that moving forward. We've got to budget for a potential downturn. I don't know that we could maintain 9-plus-percent increase in values, so we will budget for less than that."
Contact Richard Danielson at firstname.lastname@example.org or (813) 226-3403. Follow @Danielson_Times.