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Tax values plummet

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Recent reports that Orange County residents can expect to pay an average of 12 percent less in property taxes may come as a relief to some, but the repercussions that come with the reduction may not be as well received.

On May 26, Orange County Property Appraiser Bill Donegan released his “Letters of Best Estimate” that includes a breakdown of total taxable values for cities in Orange County. These values give local governments information needed to set budgets and taxes for the next fiscal year.

According to the release, total taxable property values deceased 14.7 percent in Orlando, 10.5 percent in Maitland, and 10.1 percent in Winter Park. With less money paid in property taxes, local governments must now find ways to make up the lost revenue.

“They are now in the beginnings of developing their budgets,” Donegan said, “so by the end of July, we’ll have a pretty good idea what cuts will be made, or if in fact some cities or the school board will raise their tax rates.”

@@No tax increase@@

Neither Maitland Mayor Doug Kinson nor Winter Park Mayor Ken Bradley anticipates tax increases will be necessary.

“Raising taxes isn’t in my future,” Kinson said. The city is currently looking for other ways to cut costs.

“Our objective has always been to not be in a position where we’re cutting services in any way, but being more efficient and responsive in terms of our departments and how we’re structured from an expense standpoint,” Kinson said.

Maitland City Manager Jim Williams said decisions on how to do this have not been made.

“We’re looking at everything in the city as to how we operate, programs we have and all our operations to determine what we need to do to balance the budget,” Williams said.

In Winter Park, Bradley is focusing not on making up lost revenue, but spending less in the future.

“I don’t see any interest or desire in raising our tax rates,” Bradley said. “We’re just going to work on making sure the cost side of how we provide city government is effective.”

Winter Park City Manager Randy Knight said selective employee buyouts are being considered in cases similar to those used in years past to make up for declining revenue, such as eliminating clerical positions in government offices.

However, he said it is too early to determine what positions could be affected or which services might be reduced this year.

@@Heavy on residential?@@

Property Appraiser Donegan said the amount of commercial versus residential properties a city has can change how property tax values impact a community. Having a large commercial base, he said, can lessen the tax burden for homeowners because commercial properties tend to use fewer city services than residents.

“Once commercial starts paying less, then the burden of any additional taxes is dumped on the residents and so as these communities start to put their budgets together, if — and I doubt it — there were any increase in the tax rate, the biggest burden would again drop on homeowners,” Donegan said.

According to the Orange County and Municipal Valuation Trends: 2009 Year in Review, also published by Donegan’s office, Orlando and Maitland are both composed of 50.9 percent commercial properties and 49.1 percent residential, while Winter Park is 74 percent residential and 26 percent commercial.

The impact of these figures will be known in the coming months as Orange County cities develop ways to deal with lower property taxes and government revenue. As to how the budgets will be balanced and what challenges Central Florida residents may face, “We’ll just have to wait and see,” Donegan said.