By Marvin G. Cortner
Editor

Property owners in Osceola County who have seen the value of their properties fall over the last year – which is pretty much every property category except agricultural – likely will see lower county tax bills.

The County Commission Wednesday morning in a 3-2 vote tentatively set the general fund tax, which comprises the largest chunk of county tax bill, at $6.90 per $1,000 of assessed value, up from the 2009-10 tax rate of $6.34. Commissioners in the end could still adopt a lesser amount, however.

Even with the higher rate, county officials said, many tax bills would still go down because of the 15.7 percent erosion of property values countywide.

The general fund tax rate of 6.9000 mills is based on a proposed 2010-11 fiscal year budget for this fund of $125.2 million, which would be about $12 million lower than the current fiscal year, for which the rate was 6.3396. The proposed budget reflects a two-week furlough – or its equivalent in wage, salary or benefit cuts – for county employees (excluding those working at constitutional offices such as the tax collectors' office) as well as use of $10 million in reserves.

While there was disagreement on the general fund tax rate, commissioners voted unanimously to tentatively keep the library tax as it is now – at about 25.67 cents per $1,000 of assessed value – and to raise the Emergency Medical Service tax from about 90 cents per $1,000 of assessed value to $1.07. With this tax rate, revenue for the library would drop about $899,000, while revenue for emergency services would go up $169,276.

The overall county tax rate (including 0.05 mills for the SAVE program’s operating expenses that would generate $1.78 million less in revenue), tentatively was set at 8.2748 mills, which would generate a county tax bill of $827.48 on property assessed at $100,000. The tax bill last year for the same property would have been $881.56.

Projected total revenue for the four funds is $145.6 million, a drop of about $14.5 million.

Commissioners’ comments

In opposing the general fund rate hike, Commissioners John Quiñones and Fred Hawkins Jr. both said the commission this year needs to send a message to taxpayers that it is not going to increase taxes.

“Leave it (the tax rate) the same as it is now,” Quiñones said. “That would create certainty that they (taxpayers) are going to get a tax cut and that we are going to live within our means.”

Both Quiñones and Hawkins said they are worried that small businesses that might consider coming to Osceola County would go elsewhere because of the county’s high property taxes and high fire assessment and impact fees.

In arguing for the higher rate, Commissioner Brandon Arrington said he was worried about the hole the county is digging for itself in terms of having to use $10 million of reserves next year again to balance the budget if the tax rate were to stay the same. He also said he was worried about budgets two or three years down the road if property tax revenue continues to remain flat, especially in light of the distress commercial property is now in.

“We’re going to have to make $10 million in cuts next year just to be sustainable,” Arrington said, challenging the other commissioners to offer a solution on how to avoid using reserves again if the tax rate weren’t increased. “Those cuts for fire service that we didn’t want to make this year will come back. Plus, our costs are going up. There’s going to be a big hole next year.”

Commissioner Ken Smith, who will be leaving the commission after the November election, voted for the higher tax rate but with the caveat that it would have to be lowered in the end.

“I’m concerned about any tax increase this year,” he said. “I may not support it (the rate increase) in the final vote; I want to hear from the public.”

Smith also said the commission needs to look at the overall picture of what county residents are being asked to pay in the coming fiscal year, including the dramatically higher fire assessment fees for most small businesses as well as the proposed 1 percent sales surtax that would fund road and bridge projects that voters will see on the Nov. 2 ballot.

Weighing in on the issue, County Manager Don Fisher said going with the higher rate provides about a $14 million cut in overall taxes and also helps the county deal with budgets two or three years going forward, in terms of helping to rebuild cash reserves.

“If this is done, then you don’t need to have conversations about closing libraries next year,” he said. “The (proposed) rates are higher because assessed value went down.”

When asked by commissioners to predict in which direction property values are going, County Appraiser Katrina Scarborough said that residential property is “stabilizing” but that the commercial sector will continue to suffer.

“If there is no new construction, then you won’t have a bigger tax base,” she said, adding that tax bills for property that maintained its value or went up over the last year would be higher.

Overall county budget

The overall proposed county budget for fiscal year 2010-11 is about $739.4 million, or about $61.1 million less than the current fiscal year. That budget reflects reduced spending on capital projects, the two-week furlough, reduced spending by the constitutional offices, use of reserves and trimmed down department requests.

The overall county budget peaked in fiscal year 2007-08 at a level about $195 million higher than the budget proposed for 2010-11, county officials said. Besides having to deal with less tax revenue, the county also has seen its earnings on reserves fall due to dramatically lower interest rates as well as an increase in the consumer price index, which means the cost of doing business in general has gone up.

Next meetings

The commission will hold a final public hearing at 5:05 p.m. Tuesday, Sept. 7, to adopt special assessment rates and tax rolls for the 2010-11 fiscal year, which starts Oct. 1. And then at 5:05 p.m. on Wednesday, Sept. 8, the commission will hold a public hearing to adopt tentative millage rates and budgets.

Property owners, once they receive their bills, can begin paying their taxes Nov. 1.