Budget Woes Continue
Double-digit Decline in Taxable Values Forecast
By Carl Wagenfohr
CLEARWATER - The public phase of the city's annual budget process has not yet begun, but bad news has already arrived.
"It's going to be double-digits, anywhere between 9 and 13-percent," said Pinellas County Property Appraiser Pam Dubov of the expected decline in the value of taxable property county-wide. Dubov attributed the decline to the impact of foreclosure sales on single family home and condo values, and what she observed as a large vacancy rate in the commercial market, both retail storefronts and office space.
While Dubov has not yet released her official forecast, County Administrator Bob LaSala on Monday kicked-off Pinellas County's 2010-11 budget cycle, advising County Commissioners of his assumption of a 12-percent overall decline in taxable value this year. With no change in millage rate, that decline in taxable value translates to a 2010-11 Pinellas County revenue shortfall of about $40-million.
Clearwater has not released its updated 2010-11 budget forecast assumptions, but a 12-percent decline in its taxable values would have severe consequences.
The Five Year Forecast that the city instituted last year as a planning tool assumed no change in the city's taxable property values for 2010-11. Despite the assumed flat values, a $4-million deficit was forecast, attributed largely to a 4.4-percent increase in city operating expenses.
Adding a 12-percent decline in taxable property value to the city's forecast spreadsheet would reduce revenues by about $5-million, creating a 2010-11 deficit of $9-million with an unchanged millage rate, a number confirmed by Budget Director Tina Wilson.
One good piece of budget news was disclosed this week by Finance Director Margie Simmons. The value of the city's pension fund assets grew by 28-percent in 2009, erasing some, but not all, of the losses of 2008.
To make up for 2008's decline in pension assets, the city was required to contribute nearly $24-million to the fund this fiscal year, an increase of about $14-million over the previous year.
Simmons was unable to estimate the impact of 2009's pension fund performance on the 2010-11 budget. She said that next year's pension fund contribution will be calculated by the city's actuary, Gabriel, Roeder, Smith and Company, with preliminary results available in mid-March.
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