Santa Rosa property values rising…and County wants a bigger cut
By Deborah Nelson
July 19, 2015
Santa Rosa property values rose 3.1% – about $240.5 million – over the past year,* and county officials would like a bigger cut.
They need to raise the property tax “millage” rate by almost 6 ½ percent to make ends meet, according to budget planners.
If the millage rate stays the same, the County would collect about $1.46 million more in property taxes through 2016…about $48.3 million. Last year netted $46.9 million. Keeping the same millage and collecting more money would constitute a tax increase, albeit smaller than the one being proposed.
To collect the same amount of money as last year, Commissioners would have to reduce the millage to the “rollback rate.”
The rollback rate doesn’t appear to have been included in proposed budget documents.
Those documents do predict increased State shared revenues ($275,297 more), sales taxes ($171,647 more), building permits ($200,000 more) and electricity franchise fees ($200,000 more) in the coming year.
But officials say that’s not enough.
On the deficit side, the County will collect $225,000 less in beach fees in the coming year. And presumes $1 million less in money returned by Constitutional officers at the end of next year.
The tentative budget proposes $73.6 million in operating costs. That’s almost $5 million more than the $68.7 million current year outlay.**
It’s $2.8 million more than what the current millage rate would generate, according to budget documents. To close the gap, officials want to hike property taxes.
The current millage rate is 6.0953. The proposed budget would raise it 6.4%, to 6.4911 mills.
That’ll bring in $51.4 million; about $4.4 million (9.5%) more than this year’s $46.9 million take. The rest of the operating budget comes from state shared revenue, fees and other sources.
The new rate would increase property taxes by $39.58 per $100,000 of taxable property value, according to a County press release.
What do they need it for?
Unfunded County employee raises add $1.3 million per year.
Commissioners gave employees a 3% raise in 2014. The raise was not balanced into the budget, so officials dipped into reserves and other non-recurring sources to pay for it.
The budget increase also incorporates $943,256 more in Medicaid costs the County shares with the State of Florida. That amount increases from $1,238,960 to $2,182,216 this year.
Those shared Medicaid costs are expected to fall by 15% over the next three years, to $1.8 million, according to the Florida Association of Counties.
Santa Rosa officials point to 2007 revenues to note that Santa Rosa tax revenues have been higher in past years.
But “revenue decrease” is a relative term to begin with – considering the 34.7% “windfall” increase sparked by Hurricane Ivan recovery and rebuilding. Ivan hit in September of 2004.
In 2004/2005, before the storm, Santa Rosa collected $39.2 million in ad valorem property taxes. In 2005/2006, the county collected $43.5 million.
The next fiscal year, 2006/2007, they collected $58.6 million, about a 35% increase.
The county lowered the millage rate in 07/08, but still collected $56.7 million in property taxes.
Property tax revenues declined after 2008, relative to the windfall amount, but never dipped below the pre-Ivan, 2004/2005 $39.2 million net. The lowest they dipped was $40 million in 2012/2013. They began to rise after 2013.
In 2013/2014, county property tax revenues increased 1.4% ($653,356) to $44.7 million. In 2014/2015, they increased again, by 5% ($2,255,655) to $46.9 million.
Other sources of revenue also appear to be on the rise; for example franchise fees.
That’s the extra 5% tacked onto electricity bills. Like property taxes, the money is “unrestricted” in that commissioners can spend it any way they see fit. Historically, part has been allocated to roads, part divided 5 ways between commissioners for recreation spending; and part allocated to “economic development.”
“Economic development” in Santa Rosa County has historically encompassed a broad range of spending choices.
For example, the county used “economic development” funds, in part, to pay for the $3.18 million East Milton Pullum land purchase in 2009. At that time, Commissioners voted 3-2 to buy the undeveloped interior parcel with no highway frontage for about $2.2 million more than the original, county-commissioned appraisal value of around $900,000.
In 2011/2012, the County collected $5,749,499 in franchise fees. That revenue dipped slightly between 2012 and 2014, but the 2014/2015 budget projected $6 million; and the proposed 2015/2016 budget projects $6.2 million.
As previously reported in the Panhandle Politico, power company rates appear to be rising right along with customer efforts to reduce usage: so it looks like power bills will be staying the same or increasing, and franchise fees will be a reliable source of County revenues into the foreseeable future.
Commissioners have also discussed raising gas taxes and reinstating transportation impact fees. Those fees, levied against new construction, are designed to recapture some of the public infrastructure costs associated with new development. The county established them in 2005 and raised $9.48 million between 2006 and 2008, before suspending their collection.
The fees have been opposed by local developers.
Budget documents also advocate a $9 per parcel tax for police communications equipment be established in 2017. This year, the Sheriff’s part of the budget increases by $4.1 million, despite an expected $2.67 million in revenues coming into the Sheriff’s Office for housing prisoners.
Budget workshops for Santa Rosa County Constitutional Officers and the Commission departments are scheduled for Tuesday, July 21. The workshop for the constitutional officers begins at 9 a.m. and the workshop for the commission departments following at 1:30 p.m. Both meetings are in the Santa Rosa County Commission Meeting Room located at 6495 Caroline Street in Milton.
The budget process also includes two public hearings – the first Tuesday, Sept. 8 at 6 p.m. and the final meeting Tuesday, Sept. 15 at 6 p.m. before the fiscal year 2015/2016 budget is finalized and approved by the board. All meetings are open to the public and held in the commission meeting room located at 6495 Caroline Street. The meetings are also streamed lived and available for replay at www.santarosa.fl.gov.
*Per Santa Rosa County 2015/2016 budget summary online.
**Per 2014/2015 Approved Budget, as posted on Santa Rosa County website. The total proposed 2015/2016 budget is $109,657,401. That includes the $73.6 million operating budget, plus “the proprietary/enterprise funds and all other functions and transfers.” It’s $5,709,749 more than the current year’s $103,947,652 total.
The county administrator’s full budget message and proposed budget can be found online at www.santarosa.fl.gov/budget.