A pandemic-aided surge in the local real estate market last year drove up home prices and spurred new residential construction at a pace that produced an estimated 10.5 percent increase in taxable real property values countywide.
If confirmed by final figures, the whopping growth in the tax roll would pump an additional $7.5 million into the county’s general fund in the coming year, based on maintaining the current tax rate. But the increase in revenue probably won’t cover projected expenses for fiscal year 2022-23.
That means a tax hike is possible, even likely.
“Certainly, we welcome that kind of kind of revenue increase, which helps cover the costs of funding the county’s operations,” County Administrator Jason Brown said after receiving the estimated tax roll from Property Appraiser Wesley Davis last week.
“But the county is growing, and with more people comes a greater demand for services,” he added. “So even with our efforts to spend conservatively and minimize the burden on our taxpayers, it’s going to remain a challenge to balance our budget, especially with the cost of everything continuing to rise.
“A tax increase is a last resort, but based on our projected expenditures, it’s a very real possibility,” Brown said.
Brown cited the proposed budget submitted by Sheriff Eric Flowers, who asked for an all-time-high $71 million – an 18.27 percent increase over the $60 million his agency operates under now and, percentage-wise, the biggest jump in at least 20 years.
The Sheriff’s Office is the “largest single service we fund,” Brown said. The 500-member agency accounts for more than half of the county’s general-fund expenditures.
Brown hopes to reach a compromise with Flowers, though the County Commission ultimately decides how much funding the Sheriff’s Office gets.
Flowers wants to give employees a 7 percent pay raise and begin implementing a federal minimum wage to keep up with inflation and remain competitive in the job market. He also wants to add 35 new deputies to police a county which has seen its population surpass 160,000.
“But it’s not just the sheriff who wants more money,” Brown said. “There are other agencies that have requested additional funding, as well as our own county departments.”
As the county grows, Brown said, additional staffing and facilities are needed to provide government services and amenities.
He noted increased demand for planning, processing development, building inspections, road maintenance and improvements, traffic management, libraries, and parks and recreation, as well as law enforcement and fire-rescue response.
Brown also pointed to significant increases in the costs of fuel and utilities.
He said he’s projecting for fiscal 2022-23 a $500,000 increase over the $2 million the county currently spends on fuel. He also projects electricity costs will rise $500,000.
“We are experiencing the same increased costs as private businesses or personal budgets,” Brown said. “We’re all being impacted by inflation. Our goal is to not make the problem worse for the people who live here.”
Tax roll estimates, which Property Appraiser’s offices in Florida release on June 1, provide counties and municipalities projections to plan their budgets and tax rates.
Davis said he “wouldn’t be surprised” to see property-tax revenue increase by at least another half-percent between now and July 1, when the county’s final tax roll is due.
“We’re still working on it, hoping to get the final numbers out by the third week of June,” Davis said.
Property owners can expect to see those numbers – the ones that pertain specifically to their homes and land – when they receive their Truth in Millage notices in the mail in August.
Davis said Florida’s homestead exemption, along with the 1995 Save Our Homes amendment to the state constitution, reduced the $22.7 billion taxable value of county properties by $1.7 billion.
The Property Appraiser’s Office’s assessments of properties in the Town of Indian River Shores showed taxable values jumped 10 percent from $3.58 billion to $4 billion, while values in the Town of Orchid rose 4.9 percent from $466.7 million to $494.5 million.
The taxable value of properties in the City of Vero Beach rose 8.8 percent from $3.31 billion to $3.67 billion.
The City of Sebastian saw the largest surge in taxable value, soaring 12.4 percent from $1.57 billion to $1.78 billion. The taxable value of properties in the City of Fellsmere went up 6.4 percent from $121 million to $132.9 million.
“Vero Beach has almost twice the taxable value of Sebastian, but Sebastian doesn’t have property on the island,” Davis said. “Sebastian, however, has room to grow. There’s still a lot of vacant property there. That’s not the case in Vero Beach.”
As for the county, Brown initially planned a budget conservatively based on a 7 percent increase in property tax revenue. He said he’s now “plugging in” the new revenue estimates.
“We still have some work to do, and until we get the final numbers, it’s a moving target,” Brown said. “But the tax-roll increase, whatever it turns out to be on July 1, isn’t going to bring in $11 million.
