Despite an exhilarating jump in Indian River County property values in 2020, most residents probably won’t see the lower property tax rates many are hoping for – in which case property tax bills issued this fall will be higher than they were last year.
Property Appraiser Wesley Davis released a preliminary estimate last week showing that real estate in the county gained nearly $700,000,000 in taxable value and officials say that will net about an extra $4.2 million in tax revenue for the county government if the property tax rate, commonly called the millage rate, stays the same.
Seeing that extra income in the pipeline, county commissioners could lower the millage rate to keep property tax revenue the same as last, leave the rate unchanged to reap the extra cash, or raise the rate to increase income even more.
Based on conversations with county – and Vero Beach – officials, property tax rate rollbacks are a longshot. No official would confirm that rates will stay the same, but all talked about increasing expenses and possible reductions in other revenue sources.
“It is a little bit premature to say whether the millage rate will be rolled back or if we will need the additional revenue to meet expenses,” says County Commission Chairman Joe Flescher. “But I will say this – our expenses are going up. The county has grown more in the past two years than in the previous 10 years and we will have increased emergency services demand, increased recreational demand and added infrastructure expenses.
“From what I have seen so far, the constitutional officers [who are funded by the county budget] will be up ticking their budget requests to pay for new technology and online security.”
The county will be going through its annual budget process over the next few months, trying to balance expected income and expenses for the 2021/22 fiscal year, which starts in October, and Flescher said the final millage rate will be based on the outcome of that process.
“I will be sitting down with [County Administrator] Jason Brown and going over the budget, department by department, to see where we stand. I know we’ve had to add some personnel, and we are negotiating our contract with the Teamsters, so there is that . . .
“One thing I will say, speaking as one commissioner, is that we shouldn’t anticipate an increased mill rate. I am confident we won’t raise the millage rate. So that is good news for taxpayer.”
Most property tax paid by county residents goes to fund the school district, the county general operating fund and emergency services, but a significant amount goes to municipalities, which impose their own millage rate on top of the county’s.
In Vero Beach, property owners pay about $250 per $100,000 in property value for city services with the city’s current millage rate.
According to Davis, taxable property values in the city went up $133,000,000 in 2020.
That’s a big number but City Manager Monte Falls points out it won’t have a huge impact on the city’s revenue stream.
“It is good news for us to have gotten the higher valuations, but property tax only provides about 30 percent of our revenue. I think it amounted to $7.5 million in a $25-million budget last year,” Falls says.
And state law limits how much property tax can be raised on homestead properties – those registered with the county as primary residences – regardless of how much the property goes up in value.
All things considered, Falls says an estimate of $300,000 in additional revenue due to the rise in property values “is in the ballpark” – assuming the millage rate stays the same.
“We will have to see what other revenue sources are like, before we decide on the millage rate,” says Vero Beach Mayor Robert Brackett. “For instance, sales tax could be down because of the pandemic shutdowns.
“We also have some capital projects to consider and other things to factor in. Construction estimates have to be redone because of the increase in material costs to come up with exact costs. Public works will come up with those figures.
“I will be meeting frequently with [Vero Finance Department Director] Cindy Lawson between now and the end of July when we have to come up with a “not to exceed” millage rate. After that, we can lower the millage rate but not raise it.
“As we get to August and more numbers come from state revenue and other sources we can make adjustments if needed. We want to do the budget in a prudent way and a way that is justified [by budgetary needs].
“Personally, I don’t want to lower the tax rate this year and have to raise it again next year, giving people a yo-yo sensation. I think it is better for people to have a solid idea of what is coming.”
Some property tax facts:
–The total taxable value of property in Indian River County is $21.7 billion, according to Davis. (That is the number school district taxes are based on, which is able to tax some property the county and municipalities can’t tax.)
–The actual or market value of property in the county is many billions of dollars greater than that.
–There are 83,080 residential and commercial real estate parcels in the county. Half of them – 46,276 – are homestead properties on which property tax increases are capped at 3 percent or the increase in the consumer price index, whichever is lowest. This year’s maximum tax increase is 1.4 percent, even if your homestead property doubled in value, according to Davis’s office.
–Values were up across the county, with the biggest percentage increase in Sebastian: Fellsmere values were up 4 percent to $121 million; Indian River Shores, up 3 percent to $3.6 billion; Orchid, up 3.25 percent to $500 million; Sebastian, up 5 percent to about $1.5 billion, Vero Beach, up 4 percent to $3.3 billion.
–All increases in taxable values in towns and cities, such as Vero’s $133,000,000 jump in property values, are included in the countywide $683,991,103 increase.
–Both Vero and Indian River County left their millage rates the same in the last budget process, even though property values went up substantially enough to net the county an extra $3,296,678 in property tax revenue.
