TBO.com - TBO is Tampa Bay Online

County's Budget Choices Difficult

ADVERTISEMENT

By KEVIN WIATROWSKI

kwiatrowski@tampatrib.com

Published: February 22, 2009

Plummeting property values and falling state funding have blown a $30 million hole in Pasco County's budget for next year, county officials said last week.

The deficit is forcing county officials to consider all their options for producing a balanced budget by Oct. 1, the first day of the next budget year. Those options range from gutting some county services to raising the county's tax rate, which has fallen more than 40 percent since 2000.

"The bottom line is this: Something will have to be given up," said County Commissioner Pat Mulieri. "So what do we give up?"

At the core of the county's budget problem is declining property values. Property Appraiser Mike Wells has told the county he expects home values to drop an average of 20 percent countywide, dragging down the property taxes that fuel 65 percent of the county's budget. Current estimates call for a $24 million loss in property taxes.

The decline in property values also promises to reduce the tax-based fund that pays for firefighters, potentially setting up a conflict between administrators forced to cut staff and the firefighters' union. Firefighter funds could drop by $4 million, or about 14 percent.

The county also expects to lose $2 million in state funding, much of it from gas taxes that build and maintain the county's far-flung road network. Those funds also pay for traffic signals and pothole patching.

The budget news has produced a sea of grim faces at the West Pasco Government Center, where much of the county government is based.

"I look at a traffic signal and I see $30 million," said Michael Nurrenbrock, who runs the county's Office of Management and Budget. "I find myself staring out the window at home and my son asks me what I'm thinking about, and I say '$30 million.'

"

Nurrenbrock put out the word recently to the county's various departments to prepare for budget cuts of 15 percent to 30 percent - cuts deep enough to cripple some agencies, such as Health Services, which provides assistance to some of the county's poorest citizens.

After years of expanding services to meet the needs of a growing population, the county now faces the task of deciding what its core functions are, Nurrenbrock said.

"What do we absolutely have to do?" he said. "And what may have to be jettisoned or handed over to nonprofit groups?"

The bleak outlook comes after the county has handed out pink slips to dozens of workers in the permitting and building inspection offices, both financed by development fees.

In one-on-one briefings, Nurrenbrock has offered commissioners several options for closing the gap.

Leaving taxes where they are could force the shutdown of libraries, parks and the bus system, among other things.

"Worst-case, a whole bunch of services you're used to are gone," Nurrenbrock said, adding that no one is seriously contemplating such a drastic move.

Raising taxes enough to balance the budget - a jump of 1.1 mils, or about 20 percent - would require a four-fifths vote by the Republican-dominated county commission. That would still leave the tax rate about two-thirds of what it was at the beginning of the decade.

A mil is equal to one dollar of tax per $1,000 of assessed value.

The most likely course appears to be a combination of deeper cuts to staff and services and a 10 percent to 15 percent boost in the tax rate. Exactly how much of each one will close the gap is anyone's guess at the moment.

"It's a daunting task," Commissioner Ann Hildebrand said.

A tax increase won't hit everyone the same, though.

The state's 13-year-old Save Our Homes program limits how sharply county officials can raise assessments on properties. As market values skyrocketed in recent years, a chasm opened between the market value of homes and the amount of taxes they generated.

The longer a home has had a Save Our Homes cap, the larger the gap between its market value and its tax assessment.

As property values fall, newer homes are likely to fall below their Save Our Homes cap, reducing their assessment and, by extension, their taxes.

Homeowners who have been in their homes less than five years and have $50,000 in homestead and Amendment 1 tax exemptions could see their tax bills fall even as rates increase, Nurrenbrock said.

Nearly half of the county's 129,000 homeowners have been in their homes for a decade or more. For those people, the gap between the market value and the assessed value is too great for a 20 percent decline in market value to bring them below the Save Our Homes cap.

Those owners are likely to see their assessments rise by one-tenth of a percent under Save Our Homes, producing a barely noticeable bump in their taxes - $1.61 for a house worth $400,000, for example, Nurrenbrock said.

Reporter Kevin Wiatrowski can be reached at (813) 948-4201.

Share this:

Loading Comments...

Email Print

ADVERTISEMENT