INDIAN RIVER COUNTY — The School District portion of property tax bills will go up this next tax cycle even though the tax rate has gone down due to an increase in property values. The School Board Tuesday night finalized its tax rate and its $271 million budget for the 2014-15 fiscal year.
Assistant Finance Director Carter Morrison explained that the state’s required local effort portion of the millage rate was lowered, dropping the overall proposed millage rate to 7.995 mills. However, property values increased on average by 4.65 percent throughout the county.
Morrison used the following “most likely scenario” to explain the difference property owners could expect to see on their tax bills:
A residential home with an assessed value of $200,000 with a $25,000 homestead exemption in 2013 would have a taxable value of $175,000.
Fast-forward to 2014 with a 4.65 percent increase in property values, the house would have an assessed value of $209,300 with a $25,000 homestead exemption, bringing the taxable value to $184,300.
Given last year’s tax rate, the homeowner in 2013 would have paid $1,420.30 in School District taxes. Under the proposed tax rate for this year, the homeowner would pay $1,473.48 – an increase of $53.18.
Along with the proposed tax rate, Morrison presented the budget, which is $4.18 million less than last year.
The 2014-15 budget comes in at just over $271 million, down from the 2013-14 budget of almost $275.4 million.
Though a public hearing was held Tuesday night to elicit comments from the general public about both the tax rate and budget, no public input was given.
The $271 million budget includes $15 million allocated for the county’s charter schools. Morrison explained to the School Board that the amount is based on the charters’ student population – their pro-rata share. Charters account for 12 percent of the student population.
As part of the budget, the School Board ultimately approved lowering salaries for substitute teachers, which drew concerns from some of the members.
School Board member Karen Disney-Brombach cautioned that the move could be “penny wise and pound foolish” explaining that lower salaries could keep the District from attracting quality substitutes.
Schools Superintendent Dr. Fran Adams said she shares the same concerns and, with staff, will monitor the impact.
School Board member Dale Simchick suggested that the Board consider using funds from the unrestricted reserves to reinstate the salaries.
Fellow Board member Matt McCain sympathized with the sentiments shared but warned the Board against dipping into the reserves.
He pointed out that the District is spending $5.7 million more than it is bringing in from revenues, a move that is not sustainable in the long run. Next budget cycle, even fewer dollars would be available if the Board were to take from reserves now.
In the end, the Board unanimously approved the tax rate and budget without changes.