Higher property taxes in Hernando County still won’t fix the budget in one year

Spending plan draws public rebuke and sharp words between commissioners, who are divided on the tax increase.
Hernando County Government Center
Hernando County Government Center
Published September 18

BROOKSVILLE — Hernando County property owners admitted last week that they hadn’t been watching their county commissioners as closely as they should have.

Several spoke out before a standing-room-only crowd at the first of two public hearings on the 2019-20 county spending plan. It lasted for four hours.

Even before the public comment portion of the meeting, residents could see that the commission was both divided and decided.

The majority was leaning toward the largest increase in the county’s general fund tax rate in recent memory — a 14 percent hike to help dig the county out of its $10 million budget shortfall.

Commissioners didn’t seem interested in their constituents’ input, said Southern Hills resident Phyllis Heisey.

"You all have made up your minds,'' she said. "We are going to pay the price for the bad decisions that were made in the past.''

In fact, commissioners blamed the previous county administrator and a “galactic mistake" by the former budget director, who was fired in 2018. Commission Chairman Jeff Holcomb explained that commissioners were shocked when they learned of the pending financial disaster.

Commissioners have said they were not aware of the problem until recently, but their auditor, their previous administrator and their former finance director have warned for years that tax increases and serious spending cuts were needed

In September 2018, the county staff told commissioners that to balance their budget, they must dig deeply into their reserves. They agreed to do so, violating their own long-time reserve policy. They chose that over cutting money for parks and libraries, pushing the sheriff to reduce his budget or raising taxes.

Commissioners have agreed to borrow millions from the utilities department to pay bills in the coming months. The county does not have enough in reserves to meet its financial obligations between now and the time property tax payments begin to arrive.

Commissioners have planned no cuts to parks or libraries in the coming fiscal year, but told county administrator Jeff Rogers to cut more from the commission’s budget, which is about half of the general fund expense. On Tuesday, commissioners will discuss those adjustments in the hours before their final budget hearing at 5 p.m.

If the second hearing is like the first, sparks will fly once again.

During last week’s hearing, commissioners attacked one another. Those who support the tax increase — Commissioners John Allocco, John Mitten and Holcomb — were accused of fear mongering when they suggested that without it, they’d have to consider closing libraries and parks.

Past spending and budgeting mistakes created “huge numbers” that cannot be fixed without a tax increase, Holcomb said.

“We are dead serious,” he said. “We don’t want to do this.”

Allocco said that the other commissioners — Steve Champion and Wayne Dukes — cut the tax rate two years ago to improve their reelection chances. Dukes, who won reelection last year, recommended that tax cut, saying now it was based on bad information.

"Over and over again, it’s ‘what’s it going to take to get reelected?''’ Allocco said. "It’s just ridiculous.''

The County Commission’s departments shouldn’t bear the entire brunt of the cuts, Champion and Dukes said, adding that constitutional officers (those elected to office) also should have to make cuts. They counted Sheriff Al Nienhuis chief among them. The Sheriff’s Office comprises the other half of the general fund expense, and he wants a $2.6 million increase.

Commissioners gave tentative approval Sept. 11 to a $528.1 million overall budget compared to last year’s $448.1 spending plan. It includes capital projects for utilities, road work and the airport.

The tentative plan includes a general fund budget of $123.2 million, compared to last year’s approved budget of $110.8 million. The proposed tax increase would bring in about $9 million in additional revenue for the general fund.

The vote on the initial budget proposal was 3-2, with Holcomb, Allocco and Mitten voting yes, and Champion and Dukes voting no.

The tentative tax rate for the general fund, approved by the same three commissioners, would increase by one mill, which is $1 in tax for every $1,000 of appraised taxable property value. For the owner of the typical Hernando County home with a taxable value of $75,000, the general fund taxes would jump by $75.

Even with that increase, the county’s financial consultant said, the county will have to cut spending to break even in the years to come. Plus, budget growth must be less than currently proposed for the county to build back healthy reserves and fund new projects in future years, the consultant said.

Champion continued to push for more cuts, saying the commission needs to behave as families do when they don’t have money for the things they want.

"If you can’t afford it, you can’t afford it,'' he said. "This is not sustainable.''

At the very least, Champion urged commissioners to commit to a lower rate of spending growth or to a specific total budget amount. But a vote on the tentative numbers resulted in the same 3-2 result, with the majority hoping the staff will bring adjustments to next week’s hearings.

Champion voiced concern about what an economic downturn might mean for the county’s long-term recovery.

"We’re in big trouble then,'' he said.

The general fund tax rate increase won’t be the only upcoming hit to property owners under the current plan.

They also will face an increased landfill fee that commissioners approved several months ago. The solid waste assessment will increase on their tax bills from $63.05 to $69.40. The fee has not increased in more than 15 years, and the additional dollars will fund an expansion of the county landfill, a new way to dispose of storm water at the landfill and future storm debris removal.

County utility customers likely will see an increase in their water and sewer bills next year. A new rate study will be up for discussion on Tuesday, as well.