A bad omen for social service budgets
Counties pay for relief
By BILL VARIAN and WILL VAN SANT, Times Staff Writers
Published January 7, 2008
Modest tax relief for property owners would pose a significant hit to local governments, a new state forecast shows.
Less than a month before Florida voters consider sweeping changes to the state’s property tax system, a new state analysis shows that west-central Florida county governments would collect 8 to 11 percent less money for their main operating budgets in their 2008-09 fiscal year.
School districts would face lesser reductions if the latest reform wins support because the measure shaves less of their taxing authority.
The money lost to local governments under Amendment 1 translates statewide to an average $240 annual savings for homeowners.
The revenue reductions – forecast by a team of four state economists – come on top of similarly sized cutbacks forced on local governments by the state Legislature last year in a mandated property tax rate rollback. Local officials warn that new cuts won’t be easy to absorb and that it will get harder in later years as more property value becomes exempt from tax rolls.
"If you do your job right, you’re cutting the least noticeable services first," said Eric Johnson, budget director for Hillsborough County, which would face an 8 percent cut, or $39.3-million, to the countywide operating fund. "We’re progressively going to get into more noticeable impacts."
Pinellas County faces an 8 percent reduction, or $32.9-million.
"We are talking about some popular programs that will have to be reduced," Pinellas budget manager Jerry Herron said.
Hernando County is projected to lose $6.6-million in revenue, or 11 percent of its operating budget.
Pasco County government would lose $15.9-million – a roughly 10 percent hit, according to the state forecast. That’s more than the $12.5-million operating budget for the county’s 10,700-acre park system or the county’s $10-million library budget. The county has already raised fees for ambulances and to rent park space and limited library hours to deal with the latest cutbacks.
"It’s critically important for the voters to understand that if Pasco County is forced to trim another $16-million from the budget, that’s going to force us to cut spending and services necessary to the county’s quality of life," Pasco County Commission Chairman Ted Schrader said.
The exact impact on individual cities and other agencies that rely on property taxes remains unclear since the analysis didn’t single out municipalities. Also, counties would lose additional money dedicated for specific projects or services, such as for special fire or economic development districts.
A $1.3B hit statewide
The analysis, quietly posted last month on a state Web site, comes from the Revenue Estimating Conference, a group of four economists tasked under state law with forecasting tax revenue. Three work for the Legislature and one for the governor.
The group predicts all local governments statewide would lose $1.3-billion in revenue in the first year and a total of $9.3-billion over five years.
The lower tax revenue would come because the measure on the Jan. 29 ballot would remove $112-billion in property value from the state’s tax rolls in its first year.
Hernando, Hillsborough, Pasco and Pinellas counties would strike a combined $17-billion of property value from the tax rolls. By 2012, that figure would grow to $27.8-billion because more and more property value would be exempt from taxation.
Amendment 1 is the first time in 15 years that Florida voters have considered a major change to the state’s property tax system. The proposal would increase the homestead exemption for most homeowners from $25,000 to about $40,000, and it would allow homeowners to transfer to a new home the tax benefits under the homestead’s annual 3 percent assessment cap known as Save Our Homes.
Amendment 1 would also cap increases in annual assessments for nonhomestead property at 10 percent annually and provide a $25,000 tax exemption for some business and mobile home property.
Supporters defend the measure, saying the state’s taxpayers deserve a break and the economy needs the boost.
State Rep. Ed Hooper, R-Clearwater, says the tax package may help spur home sales and, as a result, the rest of the economy, ensuring tax revenues don’t decline more.
"We can always go into a recession and nobody gets any revenue," said Hooper, a former Clearwater city commissioner. "I know it’s not easy to cut a program or project. But someone’s ox is going to be gored."
Impact on schools
How much schools will lose is less clear, as lawmakers have pledged to hold education harmless – though they have yet to identify how they would do so in a very tight budget year.
School officials say parents are likely to notice a difference.
"There’s no doubt about that," said Pinellas County school superintendent Clayton Wilcox, whose district could lose $54-million over the next five years. "It’s one of those things that kind of keeps us awake at night."
Hillsborough school officials say they trust lawmakers to make good on restoring the $8.4-million the district could lose.
"We’re realists. Holding us harmless becomes more difficult during tough economic times," Hillsborough schools lobbyist Connie Milito said.
Wilcox said the Pinellas School Board would have to rethink annual raises and employees’ health care costs.
Other cuts might include reducing guidance counselors, administrative jobs, library staff and campus monitors, who help with discipline.
Pasco School Board member Allen Altman said the district is trying to plan to avoid making changes that show up in the classroom, despite facing about $4.1-million in cuts.
He said he met Friday with state Rep. Will Weatherford, R-Wesley Chapel, to press for lawmakers to make up the lost revenue when they make funding decisions this spring.
"I try not to lay awake at night and worry about whether things will turn out to be problems," Altman said.
Staff writers David DeCamp, Thomas C. Tobin and Letitia Stein contributed to this report.
State economists predict the following revenue losses for county governments and school districts if voters approve changes to the state’s property tax system on Jan. 29.
County Projected loss Percentage of operating revenue
Hernando County $6.6-million 11 percent
Hillsborough $39.3-million 8 percent
Pasco $15.9-million 10 percent
Pinellas $32.9-million 8 percent
School Projected loss
Source: Revenue Estimating Conference, counties’ budgets