Even though every city and county in Central Florida expects to see a windfall in tax revenues because of soaring property values, most homeowners across the region will find themselves paying higher tax bills.
That’s because most governments plan to maintain the same tax rates at a time when valuations have increased significantly. Fueled by new construction and higher property values, Osceola County’s tax roll jumped by 10.7%. Other counties in the region weren’t far behind – Orange at 9.2%, Seminole at 8.2% and Lake at 7.3%.
A handful of Central Florida cities – Astatula, Edgewood, Groveland, Mount Dora and Oviedo – have tentatively set their property tax rates even higher for the coming fiscal year, which starts Oct. 1, meaning they’ll reap even more tax dollars than they would if they keep rates the same.
Politicians often claim they’re not raising taxes when in fact taxes are going up in a growing economy, such as Central Florida’s, even with the same rate.
Dominic Calabro, president and CEO of Florida Taxwatch, a Tallahassee-based government watchdog group, said elected officials should be honest and tell residents they’ll pay more in taxes if the tax rate is maintained at the same rate if property valuations increased.
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Otherwise, he said, officials should implement the so-called “rollback” rate, or the tax rate at which the city or county would collect the same amount in tax revenue as the previous year, except for revenue generated by new construction.
“We’ve seen a lot of Florida officials misrepresent and sometimes outright lie,” said Calabro, regarding tax rates that are kept the same. “It is a property tax increase if they don’t enact the rollback rate.”
The Lake County city of Mount Dora, for example, saw a 9.2% boost in its tax roll but has set its proposed tax rate at $6.50 for each $1,000 of taxable property value, a nearly 3.2% jump from the current rate. That means someone whose home had a taxable value of $100,000 after homestead exemptions would pay roughly $650, or $20 more in city taxes than the previous year.
But city spokeswoman Lisa McDonald said that rate isn’t set in stone.
It’s not unusual for local governments to set an initial tax rate that is higher than what officials ultimately intend to approve to allow for a cushion during budget planning sessions in case extra tax dollars are needed.
“It’s looking that our tax rate is not going to change,” McDonald said, explaining the higher proposed rate “gives us some wiggle room in case we need it.”
The small Orange County city of Edgewood set its tentative tax rate at $5.25 for each $1,000 of taxable value, up from $4.95. Mayor John Dowless, a longtime Republican political consultant, and other city officials didn’t return calls for comment. A city employee said Edgewood annually sets the tax rate high but eventually lowers it during budget hearings.
But even if governments lower rates slightly, it doesn’t necessarily mean that property owners will see lower bills. It’s likely homeowners will still have to dig into their wallets deeper because property values are at historically high levels.
The west Orange County town of Oakland – which saw an 18% jump in the market value of all its properties this year from 2018 – decided to tentatively lower the rate from $6.65 for each $1,000 of taxable value to $6.50.
Even so, residents will have to find additional money to pay their tax bills next year.
That’s because the Oakland rate is still above the so-called “rollback” rate. The town’s “rollback” rate is about $6.05 for each $1,000 of taxable value, according to the Orange County Property Appraiser’s office.
Mayor Kathy Stark said town officials made a commitment to reduce property tax rates every year. She added, however, that setting the tax rate at the “rollback” rate would make it financially difficult for Oakland to provide the same level of service to residents because of rising costs. The town also is adding a new wastewater system to keep up with expected growth.
“It’s allowing us to maintain the same levels of service and continue to have a very good budget,” Stark said.
Among those holding steady with their tax rate are Seminole County commissioners. In July, they decided to tentatively set the county’s general tax rate, also known as the “millage rate,” at $4.87 for each $1,000 of taxable value, or the same level as in the past several years.
“Nobody here has an interest in raising the millage,” Seminole Commission Chairwoman Brenda Carey said at the July 23 commission meeting. “The message always has been to live within our means. We just have to figure out how we’re going to do that.”
But Seminole resident Bill Hyde took issue with commissioners congratulating themselves for agreeing to keep the same rate, about 6% more than the “rollback” rate of roughly $4.60.
“Property values have increased substantially. That means that at the same millage rate, we’re going to be paying more in taxes,” he said. “They say they are holding the line on taxes. But that’s absolutely not true, because we’re still going to be paying more.”
Meanwhile, in south Lake County residents of Minneola and Mascotte will see true reductions in their tax bills next year. Officials in both cities set the tentative rate below the “rollback” number.
Minneola residents will likely see a nominal reduction of about 1 cent as the proposed tax rate drops to $6.18.
In Mascotte, City Manager Jim Gleason, who calls himself a “longtime Democrat” and a “social liberal,” said he and City Council members wanted to ease residents’ financial burden after enduring one of the region’s highest tax rates in 2011, when it was roughly $9.61.
At the time, Mascotte, population of about 6,000, was mired in debt and struggled to provide services to residents.
This year, the Mascotte council decided to drop the rate from about $7.63 to $7.55, or about 6 cents below the rollback rate.
“I’ve got a little more breathing room in next year’s budget,” Gleason said. “So it’s kind of a little win-win for us. … But I’m not going to sit here and tell you that next year we’re going to have another cut. Because at some point we’re going to need to hire more police officers or build a new police station.”
Mayor Barbara Krull said the tax reduction was possible because the city recently paid off its debts and has been financially conservative.
“It’s really good news for the taxpayers,” she said.
© 2019 The Orlando Sentinel (Orlando, Fla.), Martin E. Comas. Distributed by Tribune Content Agency, LLC.