Politics

County tax cut gets smaller

Figures are not final, but Hernando's recent growth means less of a hit on the budget.

By BARBARA BEHRENDT
Published June 23, 2007

BROOKSVILLE - With all of the gloom and doom surrounding local governments over tax reform and budget cuts, Hernando County is starting to see a ray of sunshine. The financial picture, while not great, may not be quite as bad as some had feared.

County officials had first thought the tax cut rollbacks ordered by the Legislature were going to mean a $20-million general fund budget cut. Then, it was estimated at $12-million. Now, it may be even less.

"This is all just very, very preliminary but we're thinking that it may not be as bad as we initially thought, " said County Administrator Gary Kuhl.

Money from new construction as well as the recent outcry from firefighters for some insulation from the budget axe are helping, he said.

The tax cuts approved by the Legislature last week require county governments to freeze their tax revenue collection at the current year's level. In addition, they must take additional cuts based on how much their tax collections have grown over the past five years compared to the actual amount of new construction in their county.

That additional cut could be 3, 5, 7 or 9 percent, and Hernando County was at first estimated to be in the 9 percent category. That would have meant the county would have lost $12-million in general fund revenue.

But Kuhl said preliminary figures underestimated just how much new construction the county has seen.

Original estimates put the taxable value of the new construction at $500-million in the past year. Calculations now show that number is closer to $700-million.

That means Hernando may be better able to justify collecting higher tax revenues because the county's growth rate has been so high.

And that could drop Hernando into the category of only having to cut its budget by 7 percent instead of 9, according to George Zoettlein, the director of the county's Office of Management and Budget. Zoettlein is discussing this point with state revenue officials.

With last year's general fund totalling nearly $121-million, dropping the tax cut by 2 percent could allow the county to keep roughly $2-million more in revenue.

But Kuhl warned that the figures are far from finalized.

The county received the final versions of the legislation Wednesday and county financial and legal departments are scrambling to understand how the bills will affect county funds.

One of the amendments that Hernando received this week would limit the hit on local fire services to a maximum of a 3 percent revenue cut.

Fire and police officials lobbied heavily in Tallahassee during the recent special legislative session to keep public safety services safe from the heaviest cuts.

Impacts on Hernando fire services have also not yet been fully analyzed but Kuhl said the budget amendment bill was good news for public safety, which could have been hit with a 9 percent cut.

According to Zoettlein, this could mean that the county's Emergency Medical Services, which had a budget of $5.7-million last year, and Spring Hill Fire and Rescue with a budget of $17.3-million could see 3 percent cuts that would total approximately $690, 000.

Hernando County Fire Rescue is funded in a different way, which is considered an assessment rather than a tax and would not face a cut, Zoettlein explained.

Kuhl plans to present preliminary information about the Legislature's actions and the county's initial response to the County Commission on Tuesday.

Barbara Behrendt can be reached at behrendt@sptimes.com or 352 848-1434.

[Last modified June 22, 2007, 21:00:02]