Hernando County residents could see roll-back of property taxes

Hernando County Commissioner Steve Champion’s opening comment to fellow board members at a July 7 budget workshop criticized a large property tax hike on residents last year, saying a new audit shows it was never needed. He called for a roll-back of the tax increase that was passed on a mistaken belief that the county faced a $10 million budget shortfall when the amount was actually much smaller.

BROOKSVILLE — Many Hernando County residents went into sticker shock last fall when county commissioners raised property taxes by 16%. Commissioners discussing the fiscal 2020-21 budget at a workshop July 7 said residents may see that increase rolled back a bit.

The reason is a new audit shows the county is not in as deep a financial hole as was thought when the millage rate was increased last year to correct the reported shortfall. Commissioner Steve Champion championed a roll-back during discussion of the budget workshop. He cited numbers from the new audit that show the county was not $10 million in the red as first believed, but only $351,000 shy of meeting required general and reserve fund levels. The tax increase in September, along with cost cutting, was to ensure the needed $10 million shortfall could be corrected.

“There’s a real problem with that,” Champion told his fellow commissioners, adding the county needs to course correct. “There should be a roll-back for our citizens.”

Commissioner Jeff Holcomb agreed that a reduction in property taxes may be in order in light of the new figures, but he added that some of the numbers Champion noted are “incorrect.”

The rest of the commission agreed that taxes could be rolled back, and Commissioner John Allocco said he is hopeful commissioners could come to agreement.

“We’ll get there,” he said.

Champion reemphasized his concern and clapped back at Holcomb’s questioning of the numbers.

“We raised taxes a significant amount and it was based on flawed information; it’s important and every number I gave is right out of the book — every number I said is actual.”

Jeff Rogers, Hernando County administrator, explained that the difference of opinion over the amount of the shortfall being just $351,000 is because it doesn’t take into account cuts the county made after the initial shortfall of $10 million was reported months ago. He didn’t provide a new shortfall estimate taking those cuts into consideration, however, and recommended using the current property tax rate as a basis for the new budget under consideration until the matter comes up again in September. His preliminary estimates show a roll-back of property taxes by .4223 mills could be in order. That reduction would mean a homeowner with a $150,000 home and a $50,000 homestead exemption would pay $746 as opposed to $799.

Some of the discussion at the budget workshop focused on former county administrator Len Sossamon, who told commissioners that county coffers were several million dollars short going into the 2019-20 fiscal year. Sossamon was fired in January 2019 for what commissioners called poor budget planning. The shortfall also cost former budget manager Pam Lee her job a couple of months later. Across the board, commissioners said they have confidence in their replacements — Rogers and new budget director Stephanie Russ.

Budget breakdown

Russ and Rogers presented the proposed new budget to commissioners at the workshop. As it stands, it comes in at $517.9 million, down from $528.1 million for the current fiscal year. The budget includes some new capital expenditures, new hires and software updates deemed important by Rogers, but also several cuts.

The current budget discussion is unique, all agreed, as the county faces significant sales tax losses, along with state revenue sharing and tourism income due to the pandemic. Uncertainty about the remainder of the year and whether those losses can be reversed is the worry as the new budget is hammered out. Rogers told commissioners all he and his staff can do is make projections, essentially planning for the worst and hoping for the best.

One concern is that many states are now requiring anyone who visits Florida to quarantine for two weeks upon their return. With most people only having two weeks of annual vacation, they don’t have the luxury to take another two weeks off from work to quarantine, so will be more likely to skip coming to Florida.

Russ said things could be “better or worse” by September, but she put a solid number to the very least Hernando will lose this year due to the pandemic.

All told, the county will lose $3.7 million — money that was expected from sales and gas taxes, state revenue sharing and tourism. By fall, that number could be greater, Russ warned.

Commission Chairman John Mitten said every county in the state is in the same boat.

“We’re not the only ones flying in the dark,” he said of the uncertain future.

On the bright side, some Hernando businesses have been doing well through the pandemic, commissioners noted. Some restaurants reported business was up 50% over previous years thanks to food deliveries and online ordering apps. Car sales in the county are up and big box stores, which remained open through the lockdowns, have been doing well, commissioners were told. But, they conceded that those gains came at the expense of small businesses that were deemed non-essential and closed during the lockdowns. Commissioners also acknowledged that the county’s hospitals have suffered losses due to non-emergency procedures and surgeries being canceled. Some landlords have not been paid rents due to job losses and business closings, commissioners noted.

Despite this being a troubled year, Hernando housing starts are solid and people continue to move to the county, it was reported at the workshop. The estimate presented to commissioners is that Hernando continues to add about 3,000 new residents every year. While that means new impact fees and additional ad valorem taxes, it also means the county has more on its plate in terms of serving the growing population.

Big capital improvement projects that have been put on hold for years must be addressed soon, Rogers urged. They include a new, larger courthouse, a new county government building, updating the radio systems used by first responders, new fire alarms in county buildings and new climate-control systems at the county building and Sheriff’s Office. Rogers said funding to begin the work of updating data management software for the clerk or the court and the new radios is included in his proposed budget.

Commissioners praised Rogers for a budget that comes in under the current one. Cuts to some departments made it possible. Among them are a proposed 3% reduction in the county’s Fleet Management budget. The EMS budget would be cut 3.4% and Fire Service cuts would amount to 2.8%. About 7% would be cut from the county’s economic development fund and Rogers’ own office would be cut by 3%.

The proposed budget numbers will be clearer at the next budget discussions Sept. 9 beginning at 5 p.m., Russ told commissioners. She also said that the pandemic’s financial impact on the county should be better known by then.