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Exemption for seniors could cost $2.1-million

By DAVID DeCAMP
Published January 23, 2007

An extra tax break for Pasco County's low-income seniors could drain up to $2.1-million from government coffers, according to a report for County Commissioners.

But budget director Mike Nurrenbrock's estimate is almost twice as high as the cost of the same tax break in larger Hillsborough County. His estimate is also higher than a state agency's $900,000 projection last fall, provided to state Sen. Mike Fasano, R-New Port Richey.

"I think he's probably overestimated it," County Commissioner Michael Cox said Monday of Nurrenbrock. "He's sticking to the conservative number, which is exactly what I would expect him to do."

Nurrenbrock, however, said the higher figures make sense because Pasco has a greater share of elderly people than other counties.

His report will be discussed at today's commission meeting in New Port Richey. Commissioners could begin the process to let homeowners age 65 and older have a second, $25,000 homestead exemption if they make less than $23,500 a year.

The break would allow those residents to pay lower taxes to county government - but not cities or the school district - by reducing the taxable value of their home. It would be in addition to Florida's standard $25,000 homestead exemption.

The commission has dismissed calls for the extra exemption before, although 53 other counties have put it in place, including Hillsborough, Pinellas and Polk counties. In 2001, the idea died after Pasco's cost was projected at $8-million. It died again in 2004, although surveys reported the revenue cut to other counties was less than expected.

The new break would cut into money paying for government services like law enforcement - a sticking point for commissioners.

But interest in the idea resurfaced last fall. Seniors are being crunched by high insurance premiums, and former Commissioner Steve Simon urged his colleagues in October to consider the tax break. Voters overwhelmingly passed a constitutional amendment in 1998 raising the cap on the extra exemption to $50,000.

With voters speaking so strongly, County Commissioner Ted Schrader said, "We need to look at it and see if we can find a way to make it work."

With limited information to rely on, Nurrenbrock said he used population and poverty estimates for Pasco and Hillsborough.

Hillsborough has 7,495 extra exemptions for low-income seniors. For 2007, that county expects to lose $1-million in property taxes, said Hillsborough economist Kevin Brickey.

Although Hillsborough has more than double Pasco's population of 406,000, Nurrenbrock said Pasco has a much higher share of low-income seniors. The county's west coast has long been a retirement magnet.

Using those factors, Nurrenbrock estimated Pasco would issue between 7,292 and 12,006 extra homestead exemptions.

Pasco could lose $1.1-million to $1.8-million in its general fund, plus $330,000 for fire services.

"I think there's a better chance than not that it'd be closer to the $1.8-million than $1.1-million," Nurrenbrock said.

Nurrenbrock's estimate assumes every dollar of the extra exemptions is used. But that didn't happen in Hillsborough because some homes weren't valuable enough, Brickey said. The estimate for Fasano is based on a lower amount, too.

Cox said Pasco can afford to add the exemption, noting the county's record-high $1.1-billion budget this year includes $180-million from property taxes. It came with a rate cut but still brought in more money than last year.

But a majority of the board - Commissioners Ann Hildebrand, Pat Mulieri and Schrader - said they are unsure.

At issue, they said: Balancing the cost and effects on services and other people in need, as well as possible measures by lawmakers to change Florida's property tax system.

David DeCamp can be reached at 727 869-6232 or ddecamp@sptimes.com.

[Last modified January 22, 2007, 22:10:03]