Hillsborough's property values down 10.5% this year

Taxable property values in Hillsborough County declined by 10.5 percent this year, meaning a lighter tax bill for some homeowners but bigger budget problems for local governments.

Coming on the heels of a 13 percent decrease in property values last year, the latest numbers are a grim indicator of the devastation in the area's housing market. And property values so far this year show only a slight improvement.

"We're really hoping this is it for double digit declines and maybe for declines altogether," said Tim Wilmath director of valuation for the county property appraiser's office. "But based on evidence we're seeing for the first quarter of 2010, (property values) are continuing to decline -- not as much, but nothing's going up that we're seeing."

As of Jan. 1, taxable property values in the county totaled $65 billion, down from $73.1 billion the year before and $83.6 billion in 2008. Altogether, the county's taxable value has decreased four years in a row.

Tampa's taxable property valuation this year is $22.7 billion, down from $25.4 billion last year.

The 2007 and 2008 decreases in valuation were because of legislative- and voter-approved property tax reductions.

But over the past two years, falling home sales and rising foreclosures have driven property values down. Last year, 21,884 foreclosures flooded the county's housing market. Another 6,161 foreclosures have been filed this year with the clerk of circuit court through April.

The decline in values means a lower tax bill for owners of property whose market value drops below the Save Our Homes cap. But residents who benefitted when the cap shielded their homes from rising property values will see a slight tax increase. That's because the state has a recapture provision that allows the tax on a capped property to rise by 3 percent or the annual increase in the Consumer Price Index, whichever is smaller.

For Hillsborough County government, the lower valuation means $65 million less in property tax revenues. Some of that loss will be slightly offset by increases in other tax collections, said Eric Johnson, administrator for management services.

"Sales taxes are up some; gas is up a little bit," Johnson said. "But what's really challenging is ... nothing is offsetting the loss of property taxes."

Acting county administrator Mike Merrill will present his recommended fiscal 2011 budget to county commissioners June 10. Merrill is proposing a restructuring of county government, outsourcing some county services and combining departments. Some layoffs will also be necessary, Johnson said.

County commissioners could make up the loss by raising the property tax millage, but they have resisted doing that the past three years. They may be less interested in a tax increase since this is an election year.

Tampa is looking at $16 million less in property tax collections than last year. Budget officer David Rogero said the city made large reductions in this year's budget to lessen the effect of the anticipated drop in property values. However, layoffs are still possible.

"We're trying to do all we can in the current year to head that off," Rogero said.

The Hillsborough County School District raised millage rates in 2008 to offset a 5 percent drop in property values, the first tax hike the board had imposed in years. Last year, the school district saw a 10 percent decrease in taxable values.

School district spokesman Steve Hegarty said the reduced values were not a surprise and adjustments have been made.

"We've already cut $100 million out of our budget and there's more to come," Hegarty said.