Flagler County Administrator Heidi Petito on Wednesday said property values in the county may have risen by as much as 15 percent this year, sharply more than the 9.2 percent recorded last year and the highest rate of increase since 2007. The higher valuations are generating a potentially huge windfall for local governments, if they keep their property tax rates unchanged.
In Flagler County, Petito projects a windfall of $12.3 million in addition to current revenue, yielding $7.5 million in new revenue for county government operations, $3.7 million for the Sheriff’s Office, and a little over $1 million between the other constitutional offices. Again, that’s assuming the county commission does not lower the property tax rate to account for the new revenue.
Despite the projected windfall, the sheriff has requested a 20 percent budget increase, going from the current $28.5 million budget to a requested $34.2 million. That leaves a $2.1 million gap between the revenue the county expects (absent cuts in the property tax rate) and the budget request from the sheriff. Those figures do not include the sheriff’s separate policing contract with Palm Coast. The Clerk of Court and the Supervisor of Elections also have gaps between what they’re requesting and what would be available–$159,000 for the clerk, $317,000 for the supervisor.
“A lot of this is really up in the air,” Petito said. “We won’t know the exact number for a property valuation until July 1, and again this is looking at a flat millage and it’s going to be a decision of the board moving forward on how you want to proceed.” Valuation estimates don’t usually fluctuate much beyond May estimates, especially after the property appraiser has provided local officials with preliminary figures.
“It’s in the ballpark,” Flagler County Property Appraiser Jay Gardner said of Petito’s figures. He expects it may even be better. “Palm Coast is over 17 percent right now.”
For every tenth of a mil reduction in the property tax rate, county revenue would decrease by $1.2 million. And for every reduction, there would be a concurrent widening of the gap between budget requests, wants and needs and available revenue.
County commissioners did not reveal what they would do with the tax rate, opting for more time and prudence.
“The longer we can hold off on a final decisions this time, and keep looking at things, the better,” Commissioner Dave Sullivan said, “because if we go into a recession a year from now, and we’ve established some pretty high-level costs, it’s going to be hard to take any of it back. So I just think we should be a little cautious about increases and things like that and hold off final decisions as long as we can.”
“I’ve got an overriding kind of philosophy to try to reduce the tax burden but also meet the needs of the county,” Commissioner Andy Dance said. “And I don’t necessarily want to just set an arbitrary number to millage. I think that ends up being a result of of what we view as our priorities and what we base that on, and it could be anywhere–preferably under under the flat millage. So I’ve got time, and as far as direction goes, I just I think we could set another meeting. I think each of the commissioners can chime in, but for me, I need time to break the numbers down, maybe have a personal meeting with finance just to get a better idea of of the individual breakdowns.”
Commissioner Joe Mullins lightly hinted at reducing the tax rate–he and Commissioner Greg Hansen are running for re-election–but said he was not interested in “nit-picking” the budget, leaving it to the administration to run its departments as it sees fit. But he noted that the flush amounts from federal aid that amplified local budgets are drying up, with consequences.
“I know that this does seem like a lot of money, and it is,” Petito said of the county’s needs, leaving aside constitutional officers, “but this is really being used up for some ongoing operational needs, increased costs with inflation along with addressing some of our aging fleet and facilities. But this money is entirely allocated already for next year without making any reductions in millage.” (Millage is another word for property taxes.)
For example, of the $7.5 million that would be added to county coffers, $3.9 million would go to pay increases, covering a collective bargaining agreement with firefighters, $1.6 million for capital improvements, $677,000 for ordinary operational cost increases. (Petito projects spending $1.6 million on the Agricultural Museum and utility services next year, among other projects, addressing a “quite large” backlog deferred maintenance. The entire backlog adds up to 40 million. The county’s emergency radio system requires a $2 million infusion for debt service alone.
The budget taking shape would also spend $444,000 on technology improvements mostly geared toward jail security and surveillance cameras countywide. The cost would include the price of servers and data storage. That does not include an annual $500,000 in needed maintenance and storage for the county’s technology. Expect $1.15 million in roof repairs at the Government Services Building and the courthouse, as well as flooring repairs.
And numerous wants or needs–what Petito refers to as “decision units,” meaning they’re up to the county commission to decide whether to fund or not–remain unfunded, among them a $5 million replacement for FireFlight, the county’s ageing emergency helicopter, or extending FireFlight’s service to a 24-hour clock, which would add $260,000 to the budget.
Like all governments, businesses and households, the county is contending with rising inflation. In 2015 the county passed a resolution basing budget baselines on each year’s consumer price index as of December, and capping that figure at 4 percent. Inflation hasn’t been an issue since, so there’s been no need to change the resolution. But it is an issue now. “I don’t think that the 4 percent cap is working right now with the market the way it is,” Petito said, seeking guidance from the commission to revise the resolution, move the December point as a baseline, and raise the cap. The commission was receptive.
Health costs amount to $10,500 per employee. Insurance rates have stayed the same since 2016, both for employees’ premiums and the county’s share of those premiums. The county’s own health clinics has helped stabilize costs. But it’s now a double-edged sword: it is beyond capacity, causing employees to seek care in more expensive clinics around town. Petito is proposing expanding clinic hours by 24 hours at a cost of $420,000.
The county is exploring collaborating with the cities to have joint clinics and satellite locations. Palm Coast has even proposed a 2,500 square foot building to that effect. It could be ready to go in 16 weeks, for $350,000. “I don’t know where the city manager is in Palm Coast with their board but it is something that we are looking at,” Petito said. “I don’t know if they will have an appetite to do that. But certainly we are trying to partner with the cities to see if there is an opportunity there for us.” The county is needing to solidify its insurance system, because it’s dipping into its insurance reserves to keep it going.
The county administration completed budget discussions with its various departments a month ago and expects to submit a tentative budget to the commission on July 11, Petito said. The county currently have enough reserves to run government operations for two months. Its goal is to have three months’ worth.
With some pride, Petito listed ongoing major projects: the construction of the Sheriff’s Operations center and additional purchasing building for the agency, a west-side fire station to go up at the intersection of State Road 100 and County Road 305, expected to cost $4.1 million, a new south side public library that would also house the county’s Health and Human Services Department and go up across the street from the Sheriff’s Operations center, expansion of broadband access to poorly served areas on the west side of the county, a $1 million project, drainage projects, new pickleball courts in the Hammock, and a software upgrade plan that cost $2.8 million just for its first phase.
“As a board I think that you guys should be extremely proud that you’re able to accomplish all of this with not adding any new debt service, which I think is truly remarkable,” Petito told the commission. In fact, the $23 million Sheriff’s Operations Center is being financed with a $20-million bank loan. The additional building to be used for the sheriff’s purchasing department, a $1.27 million project, is not part of that financing package. That money will be drawn directly from the county’s half-cent sales tax revenue.
See Petito’s presentation here.
Predicting the future says
Don’t get used to this tax revenue. Save it. It will not continue and you will see a fallout and foreclosures within 18 months. Prepare for vagrants, panhandlers and crime.
Real estate is now just a commodity,trading like stocks. Supply and demand. There is no true value on land values or cost to build. These homes are 200% overinflated based on demand from out of state people, cash investors, and foreign investors, for taxation gain or loss and or stock market crash indices. Most of the homes are investment properties. No intent to live in them. Larger homes are being used as hostile sand Adult living Facilities. Just following the facts, nature of greed and common trends. But it will not last. Will be worse then 2007/2008 crisis. But hey, all the realtors out there…better save your money too, and pray you’re doing the right thing.
Ed says
Great
Enough to line somebodys pockets and buy another moldy building
Jimbo99 says
Wasn’t all of this supposed to be financed with the new growth of (un)affordable housing sprouting up in Palm Coast & the rest of Flagler county ? What’s the status on the splash pad, is that going to be back up & running anytime soon ? Is this going to be an annual problem going forward ?
Me, I expect a lower tax rate,especially with the impending talk of recession for 2022 & 2023. Perhaps why Mullins noting that the Federal Funding is drying up. I wouldn’t expect Biden to be bailing out America. Looks like he spent and it only postponed the inevitable. Anyone getting used to that and expecting it to last. That was it for Biden prosperity. Wall Street Dow keeps dropping on a daily basis too. While home values appear to have increased, know that it’s nothing more than horse trading on homes people already had. Sell your house, expect the next roof over your head to cost more & the interest rate will make it even more unaffordable. Biden duped his voters, selli9ng your home & buying it back with more debt isn’t affordable housing, it’s an outright Biden-Harris lie. Inflation, gas prices, the local government is going to have to reduce taxes and share in the misery. I still don’t believe the commissioners approved salary increase even at the lower amount they did. They were warned of that as they held their meetings. They knew this was unsustainable & the bubble is going to come to an end shortly in the near future. Budget cuts may be in order when a full on recession hits. Gasoline is $ 4.50/gallon and increasing for the summer months. How high will that go is anyone’s guess ?
“Commissioner Joe Mullins lightly hinted at reducing the tax rate–he and Commissioner Greg Hansen are running for re-election–but said he was not interested in “nit-picking” the budget, leaving it to the administration to run its departments as it sees fit. But he noted that the flush amounts from federal aid that amplified local budgets are drying up, with consequences.”
https://www.npr.org/2022/04/13/1092291748/economy-recession-inflation-federal-reserve-interest-rates
Laurel says
Surprise me, commissioners. Give us a reduction in taxes!
I worked in government, and a simple fact of budgeting is that if a department has not spent all its budget by, usually, October 1st, they will spend it on anything. If they don’t spend all the budget, whatever is left is reduced from their budget by that amount next year, so they won’t let that happen. I’ve seen money spent on stupid stuff just to keep the total budget amount and then ask for more because of “needs.”
Now, how about us? I carefully sort all my recycling, unfold boxes and place it out Wednesday night for Thursday pickup along with regular garbage. Thursday is a no show for Waste Pro. Same for Friday, Saturday and Sunday. Monday, Waste Pro picks up all the garbage and recycling in the same truck. So much for that increase.
Please explain to me how the Sheriff’s Department justifies C.O.P. (citizens on patrol) in uniforms, flying down the ICW in an expensive boat. What authority do they have? What do they do? They just zoom this way, and then zoom that way. They can’t do a damned thing. Look at people’s back yards ? What’s the budget for those boats, purchase an the maintenance and fuel?
The government building needs roof and floor repair? How old are these buildings, ten years? We usually budget for our own roofs and floors for at least twenty years.
Taxes go up, they don’t go down. Government gets the “windfall,” not us. We get C.O.P. boats.
Lamo says
More for the to waste. True story…
James says
Putting the apocalyptic doomsday speak aside for a moment, this article brings up an opportunity to comment on an observation regarding how things get financed here in Palm Joke. Most municipalities that need to invest in infrastructure issue bonds… municipal bonds in particular. Why don’t we?
We take out bank loans? What’s that all about?
I recall one comment made long ago in regard to this issue (with regard to another finance story here on flaglerlive.com) by a reader who summed it up as a misguided, “pay as you go” solution that unfairly burdens the current taxpayers of the city for improvements that most likely will benefit future residents disproportionately more so than said current residents.
Well, to issue long term bonds you need a reliable income stream… do we have any? Except for property taxes? We’re not the Reedy Creek Improvement District, with a multinational to back its paper… ITT bailed out long ago. To issue bonds you have to be prepared to answer to a third “outside” entity, a ratings agency of some form or other… is Palm Joke ready for such fiscal scrutiny? From what I’ve been reading I doubt it. I shutter to think what the bond rating would be for this place.
Nevertheless, perhaps this very outside scrutiny would necessitate the changes needed to bring about a more sober, solid future for the area.
James says
I would just like to add that with further reflection on my comment above and with consideration of the article posted here on the proposed apartment development off Old Kings Road, one might also have to conclude there’s little hope that our local government will NOT stop “rubber stamping” more development.
Simply put, the one thing they have in abundance is vacant land… land that is not generating tax revenue. Since it seems to me that property taxes are the apparent underpinning of our local economy, even if some of these folks would like to “do the right thing” and stop some of these projects they really can’t. It’s a viscous circle (or cycle) of development leading to tax revenue justified development, leading to more tax revenue and then more development… perhaps until all usable land stock is exhausted.
This model probable took hold here after the exit of ITT, with the hope that some form of a “critical mass” of income would be reached as quick as possible to finance the transition to an autonomous, self sustaining economy able to deal with a larger “city” population. This is conjecture on my part, and is an explanation of the situation that assumes the actions of those responsible are motivated by “good intentions,” devoid of personal gain. But then again, we live in Florida. And hasn’t this game been played out in other regions? Has it worked out well?
Note with this concept in mind, does it really matter to the local government WHAT kind of development is put up on a given parcel of land… as long as it is generating property tax income for said government. But it should to the local residents that actually live with the choices made. When repurposing a piece of property one can only hope that the alternative uses have been considered carefully. Once developed (for human habitation), land is not easily redeveloped of another use… farmland cannot be easily reclaimed for instance. And what would do more to keep our area more economically diversified? Yet another over 50 development? More (mostly) empty strip malls? More apartments?
It doesn’t look too promising for something as intangible as the benefits of green space to a revenue hungry local government caugth in the viscous cycle.
Flatsflyer says
I built a new house in 2020, the land value was $43,000, the next year the value increase $73,000 and the land value (working) value reflects $104,000., can’t get an explanation because the numbers are still influx even though the property is homesteaders and has well over $100,000 protected. The 3% numbers probably do not apply to people who don’t support Mullins, DeSantis or Trump.
A.j says
Pay as you go is a great statement. Hiw many people follow the logic? If people did that, foreclosures would be very low, or unheard of. Vehicle repo will not exist. I believe there will be more rich people in this country.
James says
“Never a borrower or a lender be” is that it?
The existence of credit isn’t the problem, it is the misuse of credit… of which borrower or lender (or both) may be guilty.
Bell says
Sounds more like an HOA run amok than responsible taxation and growth. A shame. We are thinking about moving there but now maybe not. :(
Locals are lovely. Old Florida with a great sense of community. Taxation relative to other areas though is flat out of control.