St. Lucie County is preparing for its final budget hearing next week and is on track to spend nearly $17 million less than it did this year. The trim represents a 3 percent difference from the current year’s budget of more than $557 million.
“We are a full-service county government,” County Administrator Howard Tipton said. He and his staff presented the proposed tax rate and budget at the first public hearing late last week. “You get the future you prepare for,” not the future you deserve.
The county has set its total maximum property tax rate (known as millage) at 8.8934 – a nearly two-tenths decrease from the current millage rate of 8.9097.
The bottom line: Property taxes are going down, but property values are on the rise, meaning many property owners could expect to see their tax bill increase a smidgen.
Examining a hypothetical home with a tax-assessed value of $225,000, the homeowner would pay $2,001 under the proposed rate. The amount does not account for the 8.6 percent average increase to property values.
With the 8.6 percent increase, though, that same property owner would see the value of their home increase to $244,350 and the tax bill jump to $2,173.
Property values increased more than the county had anticipated back in July. The increase means St. Lucie County will collect an additional $1.5 million, which it plans to split 50/50 with the Sheriff’s Office.
What the budget doesn’t currently account for are the two ballot initiatives that could upend financial planning for the county – the sales tax initiative and the homestead exemption amendment.
Locally, residents will go to the polls and determine whether or not the county will increase its sales tax rate by a half-cent, bringing the sales tax to 7 percent for 10 years. Doing so would generate millions of dollars that would be split among the county, the City of Port St. Lucie, the City of Fort Pierce and St. Lucie Village. The funds would be used for a number of infrastructure improvements and stormwater and drainage projects.
Statewide, voters also will decide if a third homestead exemption should be applied. This one, Amendment 1 on the November ballot, would exclude a portion of home values between $100,000 and $125,000 from non-school tax assessments. If approved, it would establish a maximum homestead exemption of $75,000 on certain properties.
“While we can’t ever know what the future really holds, the best we can do is prepare for the expected possibilities,” Tipton told the Commission during the hearing.
He has been weighing the potential outcomes of various scenarios.
Best case, according to Tipton, would be for voters to approve the half-cent sales tax locally and voters statewide to decline the homestead exemption.
If that scenario were realized, the county’s budget would be balanced. If both measures pass, the county and cities will be better off for covering infrastructure needs but the budget would not be balanced. Revenues from property taxes would decline.
And, in the event that voters embrace the homestead exemption and reject the sales tax? “We will be literally in worse shape than in the depths of the Great Recession as we will necessarily have to reallocate existing general-fund resources to address infrastructure shortfalls,” Tipton said.
He explained his dire prediction, noting that the loss of revenue would not have been the result of a national phenomenon like the Great Recession. “The economy is going well around the state,” he said. Cutting services – which would have to happen – while the economy is healthy would be “counter-intuitive.”
“I did not build the recommended budget on the worst-case scenario as it would have crippled this year’s budget perhaps unnecessarily,” Tipton told the Commission.
He added that if the worst should come to pass, the Commission and staff will have to hold emergency budgeting meetings in December to address the infrastructure needs, which would result in departmental budgets being cut. “And no areas will be safe from this process,” he warned.
The second and final public hearings on the property tax rate and budget will be held Thursday, Sept. 20, starting at 6 p.m. in the County Commission Chambers, 2300 Virginia Ave., in the Roger Poitras Building, Fort Pierce.