Hillsborough County's Tax Revenue Takes Hit

TAMPA - The taxable value of property in Hillsborough County declined by more than 5 percent this year, good news for some taxpayers but a sign of more tough times ahead for local governments.

Only a small portion of the decline comes from a slumping real estate market. The main reason for the drop is Amendment 1, which shielded $6.5 billion in property value from the tax collector.

As of Jan. 1, taxable property values in the county totaled $83.35 billion, down from $88 billion the previous year.

During the same period, Tampa's property values slipped from $29.62 billion to $29 billion.

The figures are based on transactions in 2007 and include homesteaded and non-homesteaded residential property, commercial property and new construction.

The property appraiser has to notify local governments of preliminary property valuations by June 1 to aid their budget planning. Final figures will be released in late June.

Lower taxable value generally means lower tax bills for residents and business owners.

But for Hillsborough County government, the lower tax base and declines in other revenue such as sales taxes will slash county revenue by $87 million. County Administrator Pat Bean is expected to announce layoffs and other cost-cutting measures when she presents her fiscal 2009 budget to county commissioners Wednesday.

The county's tax base would have increased by nearly $2 billion if voters had not approved Amendment 1 in November.

The measure increased the homestead exemption and gave several other tax breaks.

Tampa's tax base dropped by a smaller percentage than the county's because of nearly $1 billion in new construction in the city, most of it commercial.

The county, though larger in size and population, had just $1.5 billion more in new construction than Tampa.

"The city tends to get the five-star projects," said Warren Weathers, deputy county property appraiser.

"The city got a big bump on new construction relative to the county," he said.

Although sliding home values played some part in the decrease, the effect was minimal because of the Save Our Homes Amendment, which since 1994 capped increases in residential taxable valuations at no more than 3 percent a year. That means even though residential market values are dropping, the taxable value of most homes is much less than market value.

County Budget Director Eric Johnson said Friday the values were slightly higher than he expected, but not high enough to blunt the deep cuts Bean is expected to reveal Wednesday.

The county collects three different property taxes: countywide, unincorporated area, and library districts.

"The countywide number is down about 5 percent from last year's budget, but reductions are not as great as we were led to believe," Johnson said. "We will probably have the ability to restore some of what we're cutting but we'll have to wait until we get the late June figures."

Amendment 1 will reduce county tax collections by $70 million in the coming fiscal year, according to budget office estimates.

The Hillsborough County Commission set aside $30 million from last year's budget to offset those losses.

But the economic slowdown is reducing county revenue by an additional $47 million, meaning Bean's upcoming budget will cut $87 million from last year's total.

In an e-mail Tuesday, Bean told county employees layoffs are inevitable. She said the county will probably not pick up increases in employee health care benefits as it has the past three years.

Other cost-cutting measures under consideration:

•Taking away two employee holidays.

•Removing or reducing the county's contribution to the deferred compensation plan.

•Reduction in land-use public hearings until construction picks up.

•Selling some county assets.

•Getting rid of underused vehicles.

"How we did things before is no longer acceptable, or even an option now, as we deal with these budget cuts," Bean wrote.