Tax Funds Hit By Housing Woes

Pasco County's taxable property value dropped by $3 billion - or nearly 10 percent - during a yearlong period ending Jan. 1, while new construction amounted to half of what it was in the previous year, Property Appraiser Mike Wells said Thursday.

County taxing authorities will see a greater decrease in tax revenue than they have in recent years because of a constitutional amendment allowing bigger tax breaks for full-time residents. The school district, which is not affected by the second homestead exemption authorized by the amendment, will see a much smaller decrease in revenue, Wells said.

Bigger drops in the taxable value are expected next year, as values, particularly for single-family homes, continue to decline, Wells said.

"Tax day in Florida is Jan. 1, and the estimates are based on the values of property on Jan. 1, 2008," he explained. "Many of those values have since gone down. That will be reflected next year."

The estimated countywide taxable value totaled $26.68 billion this year, $1.08 billion of which came from new construction. That's down from $29.69 billion in the previous year, when the county gained $2 billion worth of new construction, Wells said.

The school district stands to collect taxes on $29.1 billion worth of property.

The 2008 tallies in Pasco's six municipalities are:

• Dade City: $314.24 million, of which about $7 million comes from new construction.

•St. Leo: $49.6 million, with $5.2 million from new construction.

•Zephyrhills: $730.38 million, with $17.2 million from new construction.

• San Antonio: $60.67 million, with $1.68 million from new construction.

•Port Richey: $357.6 million, with $5.9 million from new construction.

• New Port Richey: $817.1 million, with $6.5 million from new construction.

Even with property values declining, residents who make Florida their primary residence and claim homestead exemptions will see an increase in their assessed property value when they get notices of their estimated taxes in August, Wells said. The property appraiser is obligated, by law, to raise the value of homesteaded property by the rate of inflation or 3 percent, whichever is lower. The consumer price index currently is 4 percent. Those increases will be offset for those eligible for a second homestead exemption.

About 74 percent of property in Pasco County is residential. Of that, 70 percent is homesteaded and protected by the state's Save Our Homes legislation, Wells said.

"If you multiply those numbers, 50 percent of the total value of Pasco County is homesteaded," he said. "The taxing authorities will enjoy a 3 percent increase on 50 percent of the value. When you compare the decreases in value, it's still a negative balance, but it's not nearly as bad. It could have been much worse."

Commercial Values Mostly Steady

Pasco leaders still will have to make significant cuts in the coming fiscal year - to the tune of about $17 million from funds supported by property taxes and $5 million more from other accounts, director of management and budget Michael Nurrenbrock has said.

That's not good news for county leaders or taxpayers, Commissioner Ann Hildebrand said. Residents likely will have to pay higher fees for all county services, and hours will be cut at libraries and possibly parks. Pasco Sheriff Bob White's budget also will be on the chopping block, as the sheriff's office is the biggest recipient of property tax revenue.

"When I talk about this, there is only one word: Grim. G-R-I-M," Hildebrand said. "We're still looking at what cuts we're going to have to have."

The greatest drops in property values are for single-family homes, Wells said. Commercial values are relatively steady. Among the commercial properties that are declining in value are restaurants and storage facilities, which have fewer customers as residents tighten their household budgets.

"In hard times, people don't want to spend that $50 or $60 per month," Wells said.

The value of waterfront property, particularly in the Hudson neighborhoods of Sea Pines, Beacon Square and Embassy Hills, is rapidly declining. Selling prices in those subdivisions soared from about $100,000 in the mid-1990s to around $500,000 at the height of the market two years ago, Wells said.

"Middle class" neighborhoods in central Pasco, where homes sold for $200,000 to $300,000 a couple of years ago, are seeing values drop as well. Higher-end homes in subdivisions such as Seven Oaks in Wesley Chapel are holding or increasing in value.

Estimates Influence Tax Rates

Contrary to some national analysts, Wells predicts the real estate market in Pasco will bottom out this year or early next spring.

"My view is that homes are not going to drop another 25 percent," in value, he said. "If I was in the market for a home, I would be out there."

Last year, the property value picture was nearly a mirror image to this year's. Taxable values increased by about $3.6 billion or 14 percent in the yearlong period before Jan. 1, 2007, although Wells predicted at the time it would be the last such increase for a while. In the previous year, Pasco had a record 29 percent increase in property values.

The county revalues property yearly based on sale prices. The estimates help commissioners, municipalities and other agencies set tax rates.

Retail businesses such as the planned Cypress Creek Town Center are not included in this year's estimate. Such businesses do not qualify for homestead exemptions and related tax breaks.