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Hernando Today

Officials merit credit for holding line on taxes

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The Tampa Tribune

Published: August 1, 2009

Updated:

The issue: Property tax cuts. Our opinion: County and school district officials deserve praise for reducing the burden on property owners.

Many of our local government officials "get it" when it comes to the burden local property taxes are putting on beleaguered businesses and families stretched to the limit in this protracted economic downturn.

Local governments had no problem growing their bureaucracies when the money was pouring in as property values skyrocketed. Spending increased by the tens of millions. Government officials and employees got fat pay raises and increased benefits. Government programs, services and the number of employees expanded exponentially.

Now that property values have plummeted, unemployment is at record highs and the overall local economy is struggling, it demands that cuts be made.

Hernando County commissioners and at least two school board members recognize that taxpayers can no longer continue to fund the exorbitant status quo, much less the excesses of government growth.

On Tuesday, both the county commission and school board voted not to raise their respective mill levies - the formula that determines how much property owners must pay in taxes to help fund local governments. The school district's mill levy actually will be lower by 30 cents for every $1,000 of assessed property value.

We applaud their decision.

If your residential property is valued at $150,000 and you qualify for the $50,000 homestead exemption, you'll pay $544 to the county in property taxes next year. Commissioners set the same mill levy for the 2009-10 budget year at 5.44 mills. One mill is $1 for every $1,000 of assessed property value. That's $150,000, minus the $50,000 homestead exemption, leaving $100,000 in taxable property value. One hundred times 5.44 equals $544.

For that same $150,000 property with a lesser $25,000 homestead exemption for school districts, you'll pay about $934. School board members actually set a lower mill levy for 2009-10 - 7.47 - in contrast to the 7.77 mill levy this fiscal year. They could have opted for a .25 mill increase - still slightly lower than this year's mill levy - but voted not to implement it.

School board member Pat Fagan summed it up best by noting that increasing the district's mill levy would cause the board to lose the support of residents at a time when so many are having economic difficulty.

"They would not be with us when we need more money for capital improvements down the road," Fagan said.

Because it's likely the value on most properties declined last year, most property owners can expect a lower tax bill. If your assessed property value declined, say, 10 percent, then your tax bill will be about 10 percent less for your county and school district tax bill - a savings of about $150 on a homesteaded property valued at $150,000.

Still, we have concerns.

Now that county and school officials have set their respective government mill levies, where exactly are they going to cut?

While some cuts have already been well documented, the county, for instance, is still looking at using $3.7 million in reserves to balance its budget. Commissioners have said they're willing to dip into $3 million in reserves for each of the next three budget cycles.

Instead of dipping into reserves, the county needs to cut spending now or it could be far worse next year. Propping up government expenditures with reserves will make it even more difficult to cut next year.

Property values are likely to post even greater declines this year, therefore reducing the amount of tax dollars local governments will be able to collect using the same mill levies next fiscal year. If county government spending isn't cut this year, those cuts likely could be more than double next fiscal year, putting the county in a leaky fiscal boat that reserves simply won't be able to float.

If local government officials think getting through this year on reduced property tax receipts is going to be tough, it's likely to be more difficult to maintain spending levels the next year, which, by the way, is an election year. Incumbents are likely to hold the line on property taxes to ensure re-election.

We appreciate the county commission and school board not increasing property taxes in these difficult economic times.

Putting both government entities on solid financial footing for next year's anticipated revenue hits is key to this budget cycle.

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