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Highlands Today

County's Tax Base Drops

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By Jim  Konkoly | Highlands Today

Published: June 2, 2008

SEBRING — Falling sale prices for homes in Highlands County, as is happening in most parts of the country, will put Michael Wright on the proverbial hot seat right away.

On Monday, Wright started as the county's administrator and learned he'll have to recommend to the commissioners either budget cuts or an increase in the tax rate.

Officials with the school board and the cities of Sebring and Avon Park also face the same tough choices due to the troubled economy and falling home values.

The taxable property values overall in Highlands County dropped 9.2 percent from last year, according to the preliminary report by county Property Appraiser Raymond McIntyre.

That will mean about a $4.6 million decline in tax revenues to run county government, according to Bernis Gainer, director of the county's Office of Budget and Management.

The five county commissioners, who will make the decision, and Wright, who will recommend a course of action, will discuss their options over the next several months before making a decision.

Gainer said there are only two options when property values drop, causing taxes paid by homeowners and tax revenues to drop, too.

One is to raise the tax rate so that tax revenue remains steady. The other choice, Gainer said, is to leave the tax rate the same, which will mean budget cutting.

"It's going to be a tough call and the board (of county commissioners) will have to make that call," Gainer said.

Because of all the bad economic news nationwide, Gainer said, McIntyre's figures probably didn't surprise people.

The decline in the tax base hit every area of the county except Lake Placid, where the total taxable value of property rose by 3 percent, going from $206 million in 2007 to $212 million.

All of the property valuation numbers come are preliminary and come from McIntyre. Final figures will be given out in time for the new fiscal year budgets to be passed by the county, school board and the municipalities.

In Sebring, the tax base fell by 1.6 percent, dropping from $729 million in 2007 to to $717 million.
The tax base of Avon Park fell by 5.2 percent, dropping from $267 million last year to $254 million.

For Highlands County, total valuation of taxable property dropped from $6 billion and $867 million to $6 billion and $649 million. That is a reduction of $632 million.

Highlands County schools also will see a decrease in revenue unless there is an increase in the tax rate because its tax valuation dropped by 3.2 percent, going from $6 billion and $875 million in 2007 to $6 billion and $649 million, a loss of $31 million.

In accepting the job in mid May, Wright said he wanted to move here from Tallahassee and begin work as soon as possible because all local governments in Florida are facing budget troubles this year.

The county's new budget is usually passed in mid to late summer for the new fiscal year, which starts Oct. 1.

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