The days of rising property values and years of declining millage rates are over.
That was Finance Director Tom Kelley’s message to approximately 40 people in attendance at a Longboat Key Public Interest Committee tax forum held June 11, at the Longboat Key Hilton Beachfront Resort.
Kelley explained that the town gets more than 60% of its revenues from ad-valorem taxes.
“Those revenues were great when island property values rose from $1.8 billion in 1995 to $6.6 billion in 2008,” Kelley said.
During that time period property values more than tripled in value, while the millage rate hit an all-time low of 1.0462 mills.
Fast-forward to today.
“Our millage rate was raised to 1.5 mills last year and we expect $600,000 less in revenues compared to last year,” said Kelley, who told the crowd property values are expected to decline another 10% this year.
“When values decline, it’s a significant hit to our revenues.”
Further frustrating the audience, Kelley explained that only 10% of a Longboater’s annual tax bill is related to Longboat Key.
The Sarasota County portion of the Key alone, Kelley said, sent $55 million in taxes last year to get back just $5 million for the Key.
Key resident Chuck Fuller asked why the home he has owned for 20 years on the Key continues to have the same tax bill even though the value of his property has decreased.
Manatee County Property Appraiser Hackney explained to Fuller that his homesteaded property allowed him years of only modest tax increases.
“You benefited from having the cap all those years,” Hackney said. “Now your taxable value is maintaining until the market value of your home and your cap value are equal.”
Kelley also explained that only 30% of the properties on the Key are homesteaded.
“Now the non-homesteaded property owners are seeing some relief while the homesteaded properties are paying the same amount in taxes until the playing field is leveled.”
PENSION PLANS DEBATED
Finance Director Tom Kelley told those in attendance at a Thursday, June 11 tax forum that now is not the time to consider eliminating the town’s three pension plans.
“If we got rid of the plans today, we would have to pay off all of the liability in full,” Kelley said. “It’s a complicated issue and there is no easy way out.”
Kelley also explained that it would be difficult for the town to hire employees without the plans.
“The town of Stuart switched to defined benefit plans and switched back within a year because they couldn’t hire anyone,” Kelley said.