PANAMA CITY — Residents were unsuccessful in convincing the Bay County Commission on Tuesday to back down from increasing the county’s property tax rate by about 27 percent.
The increase would add $142.75 to the bill of a home valued at $150,000 with a homestead exemption.
Commissioners on Tuesday night approved a resolution adopting the county’s overall $265.9 million budget for the coming fiscal year, which would be funded from an increase in the general millage rate from 3.65 to 4.65. One mill equates to $1 of tax for every $1,000 of value.
Beatrice Negy said she is a homeowner as is her mother, 95-year-old Bertha Smith. She said her mother is on a set income and can’t afford a tax increase of this rate.
“You all have to gradually increase it over time, not all at once like this,” she said. “I’m concerned for her and all the other people in Bay County.”
Panama City resident Greg Rick said if businesses in the private sector raised their rates, their customers would go away. He said taxpayers can’t go somewhere else if they are unhappy about a tax increase.
“When property prices go down 50 percent, that’s when have to hit your reserve fund, (the tax rate) should be down,” he said.
He encouraged the commission to consider a lower increase in taxes.
“Do another 8 percent,” he said. “To hit people with 26 percent off the bat is unconscionable. What we are dealing with is private property owners who have seen their values drop.”
Despite the residents’ pleas, commissioners gave final approval to the tax increase, saying it is necessary to replenish the county’s reserves, which had to be spent at a clip of $6 million a year during the recession to balance the budget. As property values declined during the years of the recession, the county didn’t raise the tax rate, meaning the county had less funds each year to work with, county officials have said.
Reserves were getting so low that there would be a negative $2 million reserve fund in the coming year if the tax rate wasn’t increased, Bay County Budget Officer Ashley Stukey said.
Stukey said there would be a serious decline in county services without the tax increase, with $6 million having to be cut out of the budget and 104 positions trimmed.
Stukey said if the county had adopted the rollback rate and maintained it from when the recession started to today, instead of keeping the tax rate the same, the current millage rate would be 5.31 mills compared to the 4.65 rate adopted on Tuesday night. A rollback or roll-forward rate is a property tax rate that generates the same amount of revenue as the previous year. When values go up, the rate would roll back to generate the same revenues, and the opposite would be true when values go down.
Had the county adopted the roll-forward rate when property values declined, it would have resulted in $111 million in revenues coming to the county in recent years, Stukey said.
“Instead, we held (the rate) at 3.65 as property values began to decrease,” he said. “In effect, we were lowering ad valorum every year.”
Stukey said prior to the meeting the county’s overall property values this fiscal year did increase on average by about 1.8 percent this year, but the values didn’t increase for everyone. This means that the actual tax bill people will be paying starting in November could end up being more or less than 27 percent, based on the latest valuation of their home.
The commission also gave tentative approval to other tax hikes that are only paid by residents in certain areas of the county. These include a .0475 increase in the millage rate for the Mosquito Control District, which is about $4.75 a year for the owner of the $150,000 home, and a 0.38 millage increase for the Fire Services Taxing District, which adds up to about $38 a year for the owner of the same home.
Of the $14.3 million expected to be generated from the increased millage rate, about $7.5 million is going to county reserves. About $6 million of it is replacing the reserves the county has had to tap into in the prior year, and another $1.5 million is being added to those reserves.
Clerk of the Circuit Court Bill Kinsaul said he has had a growing concern in recent years about the county’s reserves continuing to dive, which if not addressed could hurt the county’s credit and bond rating. He said when he came into office the reserves were at $31 million. Today, the fund is at $8 million.
The increase in revenues also is being spent on leasing 30 new sheriff’s vehicles at a cost of $282,000; nine new detention officers for the Bay County jail at an annual cost $440,000; $990,000 for a 3 percent salary increase for county employees, sheriff’s office employees and jail employees; $1 million for road resurfacing; $390,000 for computers and servers; $48,000 for an animal control communications position and $2.5 million going to Community Redevelopment Agencies.
Stukey said by law when the tax rate increases the county must increase the tax revenues to the CRAs. He said Front Beach Road CRA on Panama City Beach will get the most of these funds.
The county also is budgeting $700,000 for additional funds it might have to pay out to the state for the Department of Juvenile Justice. Stukey said if the county wins its legal challenge against this payment, it might not have to pay all of this out.
“Even though we are in a lawsuit, it is prudent we budget the entire amount,” he said. “If the lawsuit prevails, we’ll be able to scale that back.”
Commissioner Mike Thomas said the county has reached a point where it is dipping so much into reserves it won’t have adequate funds in a disaster.
He said the $8 million in the fund is not enough to deal with a major disaster such as a hurricane or oil spill.
“That’s why it is time to put that money back, in my opinion,” he said. “The county could not fix what it would need to fix if we had a disaster.”