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Pasco Property Appraiser Expects 8% Value Dip In '08

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By JULIA FERRANTE

The Tampa Tribune

Published: February 12, 2008

Updated: 02/12/2008 03:36 pm

DADE CITY - Property Appraiser Mike Wells predicted Tuesday that Pasco County's taxable property value will decrease by 8 percent – or $2.5 billion – in the coming year, after several years of record growth.

Wells told the county commission things could be much worse if Pasco were not predominantly a residential community. Pasco's taxable property value last year was an unprecedented $29.7 billion. By comparison, in 1997, it was $7.9 billion.

"In Pasco County, things are not nearly as drastic as you may be reading in the media," Wells said at a meeting at the historic Pasco County Courthouse, noting that 74 percent of Pasco's taxable value is residential, and home values generally are not declining as rapidly here as they are elsewhere.

Voters on Jan. 29 approved a constitutional amendment that provides bigger tax breaks for residents who claim a primary residence in Florida. Residents who live in unincorporated Pasco and are eligible for bigger homestead exemptions stand to save about $180 each, Wells said. Those who live in cities and towns would save a little more.

About 70 percent of Pasco residential property owners claim $25,000 homestead exemptions now, Wells said. Most will take advantage of an additional $25,000 homestead exemption next year, Wells said.

The savings to homeowners means government officials will take in less revenue for services such as law enforcement, parks and libraries at a time when expenses are going up and the real estate market has dramatically declined.

Pasco Management and Budget Director Michael Nurrenbrock estimates the county commission will lose $16 million from the general fund as a result of the amendment, plus $2.5 million from a fire and rescue taxing district account. The total budget for this fiscal year is $1.2 billion.

The losses will be offset somewhat by gains in new construction, which Wells estimated at $800,000 this year. In recent years, new construction has added $1 billion to the county's taxable property value. Wells predicted new construction will comprise much less of the taxable value next year.

"We've gone through a period of growth this county has never seen before. It was astounding to me the price people were paying for property, and that went on for three or four years," he said. "In the middle of 2006, it was as though the faucet was turned off."

County commissioners have decreased the property tax rate in recent years as they took in more money from exploding home and business values. Property owners this year are paying $5.43 per $1,000 of valuation, minus any exemptions. Those who live in the fire taxing district pay an additional 99.5 cents per $1,000 of valuation.

In 1997, Pasco's property tax rate was $9.10 per $1,000 of valuation, Wells said, although the county was taking in less money overall, and homes were valued at much less.

Although market values are going down in most parts of Pasco, property tax assessments for residents protected by homestead exemptions likely will go up, Wells said. In a declining real estate market, property appraisers are required to raise taxable values on property protected by Florida's Save Our Homes law by 3 percent or the rate of inflation, which is about 4 percent. That means residents who claim homestead exemptions will see their property values increase by 3 percent.

"The good news is homesteaders will enjoy another [$25,000] homestead exemption," Wells said.

Early estimates show that Pasco's home values have dropped by about 5 percent in residential communities. That's not true everywhere. In Wesley Chapel's Seven Oaks, where most homes sell for $400,000 to $600,000, property values are remaining stable. Home values have, however, decreased between 15 percent and 20 percent in some of west Pasco's older neighborhoods, such as Sea Pines west of U.S. 19.

In better times, home values were rising by as much as 15 percent, although assessments for properties with homestead exemptions were capped at 3 percent or the rate of inflation, Wells said.

It is unclear how much "portability" — a provision in the constitutional amendment allowing Florida residents to take their homestead exemptions with them when they move — will cut into the county coffers, but Wells estimated $127 million. The portability clause will be retroactive to Jan. 1, 2007. Homeowners who have sold their homes since then will be able to transfer their savings to their new property, although the reductions will be measured in percentages rather than dollars.

"If you downsize, you take the percentage of the value" not the dollar amount, Wells said. "If your savings is 30 percent and you move into a smaller home, you would enjoy a 30 percent [break] on the smaller home's value."

A new exemption on tangible personal property, such as on attachments to mobile homes, will remove 22,000 people from the tax rolls or about $72 million, Wells said.

County commissioners last year had to cut close to $16 million from accounts supported by property taxes because of state-mandated tax reform. Services on the line in the coming year include expenses for the sheriff's office, parks and recreation department and county libraries, as well as elderly nutrition and veterans' services. The county also has a hiring freeze, although some positions have been filled.

Commissioner Michael Cox, who opposed the constitutional amendment, said its result may be painful but the county will be a "leaner, more efficient organization," much like corporate downsizing.

"We will have to change the way we do business," he said.

Reporter Julia Ferrante can be reached at (813) 948-4220 or jferrante@tampatrib.com.

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