CC Minutes 07/09/2013 Budget Workshop

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H6113 - State Legislature mandated property tax cut ** Amendment 1- Property exemptions, real estate decline, and caps on growth in millage rates ***Economic Recession **** Unusually deep VAB reductions after FY13 budget and levy set For the first time in six years taxable values for Casselberry have shown positive growth. At present it measures 2.71%. Appreciation was led by single family residential (2.41%) and especially multi -family apartments (22.64%). This is evidenced by healthy property sales bringing new taxpayers into the community. The sale of Newport Colony Apartments alone added about $10,000,000 to the tax base and 40% of all value growth. The Department of Revenue requires that the City report its "rolled -back rate" for millage to determine what rate (when applied to the new year) would cause a tax levy in approximately the same amount as the year before. For FY 2013 the City set its millage rate at 5.45. Because taxable values have grown higher for FY 2014 the rolled -back rate calculates to be lower. For FY 2014 it is estimated the rolled - back rate is 5.306 mills. The following table shows the difference in what the City would collect for FY 2014 if it does not lower its millage rate to rolled -back. Note: Due to nuances in the calculation of rolled -back rate and the existence of CRAB, a levy based on the FY 2014 rolled- back rate would actually be lower than the levy in FY2013 by $35,876. Millage 5.4500 5.3060 0.144 Revenues $5,541,244 $5,405,170 $136,074 Since the passage of "Property Tax Reform", the Florida legislature has sought to limit the growth in the property tax levy. It has been highly scrutinized and controlled. Keeping pace with what the law allows, the levy cannot easily grow from one year to another faster than the rolled -back rate. The levy under State statute is allowed to grow with the rate of per capita income (PCI) for Florida citizens. For 2012 per capita income grew at a rate 1.69%. That is the increment applicable to FY 2014 that a city may raise its millage above the roll -back rate with a simple majority vote and grow the levy at a rate Floridians can presumably afford. The table below shows the difference between rolled -back rate and one that was set with the PCI as the standard for growth. M illage 5.3957 5.3060 0.144 Revenues $5,496,517 $5,405,170 $91,347 During the last few years as property values plummeted the City did not set its levy according to PCI or even to rolled -back. Casselberry held its millage rate at 5.45 mills while its levy fell 35%. The Florida legislature allows credit for past reduction in tax levies. It requires the calculation each year of an "Adiusted Current Year Rolled -back Rate" to set the limit on how high a levy may be with a simple majority vote. Given the City's responsible behavior, the adjusted rolled -back rate is now estimated to be 7.3134 mills for FY 2014. If the City were of a mind to take full advantage, it could raise its levy another $1.9 million. M illage 7.3134 5.4500 1.8634 Revenues $7,450,087 $5,541,244 $1,908,843 A-7