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HomeUncategorizedFact Check: Are Hernando County taxes going up or down?

Fact Check: Are Hernando County taxes going up or down?

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By ROCCO MAGLIO
[email protected]

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Fact checks can be difficult as there are often valid arguments supporting different assessments. It often comes down to from whose perspective you look at the issue. If you look at it from a certain taxpayer, the average taxpayer, or the county budget you will receive different answers. It is further muddled by ad valorem taxes only being a third of the revenues that the county receives.

If you look at this year’s total tax assessment versus last year’s total tax assessment the amount is increasing. Choosing a millage rate that keeps the assessment amount the same is considered the rollback rate, which this year was 9.2126 mils. The proposed aggregated millage rate is 9.4844 which is a 2.95% increase over the rollback rate. If you look at the tax rate purely in terms of millage rate, the rate is being reduced from last year’s aggregate millage rate of 9.7344.

How can both the overall assessed taxes go up, but the millage rate go down? The simple answer is increasing property values. If the value of your house increases, then the millage rate must be reduced by the same percentage of your house’s increase in value for you to wind up paying the same dollar amount in taxes for the next year.

The State of Florida requires municipalities to report the rollback rate to their constituents- which is the millage rate that would produce the same amount of tax revenue as the previous year. If home values increase more than the millage rate is reduced, then tax assessments will increase while the millage rate is reduced. Not all homes in an area value will increase by the same amount, so some people may see their taxes go down while others might see a tax increase.

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The difficulty of determining what an individual homeowner’s experience will be led to the use of the overall taxes year over year comparison. In general, this metric can provide insight into how the budget is changing over time, since this shows whether the government’s total taxation is increasing or decreasing. The tax rate that would result in the same assessed value as last year is called the rollback rate. The State of Florida requires the rollback rate to be prominently displayed on the “Truth-in-Millage” (TRIM) notices. The TRIM act requires that a tax rate higher than the rolled-back rate be advertised with a “NOTICE OF TAX INCREASE” for the Final Budget Public Hearing.

Keeping the budget the same usually means that the government is contracting slightly since the rising cost of goods and salaries means that they will not be able to purchase the same items and maintain the same staffing due to inflation. If a government was to maintain the rollback rate for ten years while inflation increased at 3% the resulting budget would buy around three-quarters of what it used to.

Employee related expenses are a large part of the budget. Because of contracts with unions representing the county employees, a certain percentage raise is often required. There are also salary increases to keep pace with inflation, these are generally referred to as cost of living increases. Without a cost of living increase employees will not have the ability to continue purchasing the same amount of items the next year. Salary increases are also an important retention tool and as staff gains knowledge they become more valuable. 

The rollback rate does not account for inflation, it provides a simple value that is easy to understand. Many elected officials promise to not raise taxes and according to the rollback rate they are, but it is not that easy. A better measure would be a rollback rate that takes into account inflation in some way. The AARP listed a couple of estimates of the Social Security cost of living adjustment (COLA) for 2021 to be between 1.1% to .44%. 

The current county millage rate is reduced from last year’s rate of 9.7344 to a millage rate of 9.4844. This current millage rate is a 2.95% increase over the rollback rate, so more money than last year will be collected via taxes. This means it is more likely that your taxes will go up rather than down. 
 

FY 2021 Budget Articles:

https://www.hernandosun.com/article/fact-check-are-hernando-county-taxes-going-or-down 

https://www.hernandosun.com/article/five-year-capital-improvement-plan-includes-239-projects-totals-over-410-million

https://www.hernandosun.com/article/countys-first-fy-2021-public-budget-hearing

https://www.hernandosun.com/article/july-7-2020-hernando-bocc-budget-workshop

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