When she started with the city of Sarasota Finance Department a dozen years ago, Kelly Strickland recalls the appraised tax values of residential and commercial properties in Sarasota were declining year over year.
Thus were the ad valorem revenues that resulted in the throes of the Great Recession.
A consistent upward trajectory in the range of 6% to 7% over the last four years, though, is expected to spike by 16.75% as budget season approaches, per the latest projections by the Sarasota County Property Appraiser's office, something Strickland, the city’s finance director, said she has never seen.
“The first year that it went positive, we didn't know what to do,” Strickland said. “We had been in such a cut mode forever. This is the highest that I have seen the values increase in my career.”
Over the next several weeks, it will be up to City Manager Marlon Brown and the City Commission to balance the windfall and the needs of city government against those of the taxpayers, all with the backdrop of rising inflation.
Per the June 1 county estimate, the total property value in the city was $14.6 billion, up from $12.5 billion last year. As the final tally due July 1 is historically expected to be only marginally different, that means an additional $5 million in the city’s coffers, providing no adjustment is made to the property tax rate to offset the difference.
The Finance Department begins building the budget every January in anticipation of the June 1 estimate from the county. The budget will be based on the final July 1 figures.
“There's usually not that much of a change from June to July, so we were very excited when we saw these numbers,” Strickland said.
Excited because, for the city, it means additional revenue. For the residents facing higher property tax bills, probably not so much.
“The city manager is very much aware of what the economy looks like today, and the issues that people have, Strickland said. “We're just looking at different situations that might be best for the city and its citizens.”
The budget process begins with the capital improvement program portion, then in March is opened up to city departments to submit their financial requests by April. Finance then meets with each of the department heads to discuss their submissions. Once the ad valorem revenues are calculated, city commissioners receive a workbook on July 5. Budget workshops are scheduled for July 25-26.
Should commissioners decide, the property value windfall may provide an opportunity return some municipal functions to pre-pandemic levels.
“During Covid we asked the departments to cut as much as possible, and we've been working on shoestring staffing since," Strickland said. "As the times have gotten better, our sales tax revenues are coming in, so departments are asking for more personnel to get those people back where they had either frozen positions or eliminate positions. Now gas is just way up there, so that's an increase in costs.
“Another increase we were able to fund is a lot of our IT projects. We're moving toward being a 'smart city' and processes are moving to the cloud. That's an expense that hits our operating budget, and it doesn't qualify for the capital dollars that we have that are specifically for capital projects. So that's another push from departments is to fund that type of expense.”
Longboat Key property values have also experienced double-digit gains over 2021, with the combined valuation reported by the appraisers' offices in Sarasota and Manatee counties up 13.5% at $7.34 billion.