BUILDING A BUDGETTo Weather the Storm

Structure and Services

February, 2008

The TRIM * Notice

* “Truth in Millage”

Figuring Your Property Tax

Taxable Value x Rate = TAX

Example:Taxable Value: $100,000Rate: 5 mills {$5 tax per $1,000 of value}TAX = ($100,000 / 1,000) x 5 = $500

Market Value*vs. Taxable Value

Taxable Value = Market Value – Exemptions

Typical Exemptions:Homestead (up to $50,000 on first $75,000 of value)Low-Income Seniors

Save Our Homes (SOH) Cap has had a major impact on taxable values

* Market Value is also called Just Value. It is a prediction of the most probable selling price of the property less the approximate cost of the sale. It includes the value of the land.

Taxable Homesteaded Value May Grow Even if Market Value

Declines

Taxable Homesteaded Value May Grow Even if Market Value

Declines

59%41%

Taxable Value of Homesteaded Properties Value of Save Our Homes

Exemptions

FY 2007 data

The Save Our Homes “Recapture Rule”

Value not taxedValue taxed

Year One Year Two1

Market Value 150,000$ 135,000$ (15,000)$ -10%

less: Homestead Exmptn (25,000)$ (25,000)$ -$ 0%

less: Save Our Homes (50,000)$ (33,000)$ 17,000$ -34%

Taxable Value 75,000$ 77,000$ 2,000$ 3%

Tax Rate (mills) 20 20 - 0%

Taxes 1,500$ 1,540$ 40$ 3%

Change

THE RECAPTURE RULE: AN EXAMPLE

Assessed Value 168,130$ less: Homestead Exemption (25,000) Taxable Value 143,130

FY08 Percent ofTax Rate Tax Bill

TOTAL COUNTY-WIDE 5.4562 780.95$ 27%

TOTAL SCHOOL DISTRICT 7.7310 1,106.54$ 39%

TOTAL CITY (example) 4.6777 669.52$ 23%

TOTAL OTHER 2.0722 296.59$ 10%

GRAND TOTAL 19.9371 2,853.60$ 100%

TYPICALLY, LESS THAN ONE-THIRD OF THE

EXAMPLE FOR RESIDENTIAL TAXPAYERTaxable Value * Property Tax Rate = Property Tax

PROPERTY TAX BILL IS FOR COUNTY GOVERNMENT

Other Taxing AuthoritiesSchool DistrictCitiesMulti-County Authorities

SW Florida Water Mgmt District (“Swifmud”)Pinellas-Anclote River Basin

Special Districts

(examples)Transit (PSTA)Juvenile Welfare Board (JWB)

Districts with tax rates approved by the BCC (examples)

Fire DistrictsFeather Sound Community Services Palm Harbor Recreation and Library

0

2

4

6

8

10

County-wide 6.801 6.801 6.801 6.1 5.4562MSTU 2.356 2.356 2.356 2.356 2.0857

2004 2005 2006 2007 2008

County-wide rate decreased over 20% since FY2006

Property Tax Rates FY2004-2008 1 Mill = $1 Tax per $1,000 of Taxable Value

Property Tax Rates FY2004-2008 1 Mill = $1 Tax per $1,000 of Taxable Value

Other Major Revenue Sources Show Little Or No Growth

Other Major Revenue Sources Show Little Or No Growth

37

38

39

40

41

42

43

2003 2004 2005 2006 2007 2008 2009

Mill

ions

2003 2004 2005 2006 2007 2008 2009

Sales Tax: 5% decrease since FY06

“Where the Money Comes From” Depends on the Level of Government

FEDERAL GOVERNMENTIncome Taxes, Social Security Taxes

STATE OF FLORIDASales Taxes, Transportation Taxes

SCHOOL DISTRICTSales Taxes, Property Taxes

CITIESProperty Taxes, Utility Taxes, Franchise Fees, User Fees, State Shared Revenues

COUNTIESProperty Taxes, User Fees, State Shared Revenues

“Classic” Local Government Structure

Citizens

Elected Officials (Mayor or Council)

Appointed Administrator

Department Department Department

Attorneys andAuditors

County Budgeting: The Rules are Different Here

Also: Special Districts (such as Library Cooperative, Feather Sound Community Services District, etc.) have dedicated revenue sources

Inside the Fiscal Year 2008

Budget

(October 2007 – September 2008)

What IS a Budget?

A Policy Document

A Financial Plan

An Operations Guide

A Communications Device

The2008 Pinellas County Budgetis:a) over 50 departments and agenciesb) 2 billion dollarsc) two and a half inches thickd) all of the above

Pinellas County FY 2008 Total Budget $2,028,661,720

Pinellas County FY 2008 Total Budget $2,028,661,720

Budget by Organization Budget by Source

$481 M 24%

$305 M 15%

$495 M 24%

$748 M 37%

$1,336 M 66%

$343 M 17%

$350 M 17%

BCC / County Administrator

Elected Officials

Other

User FeesDedicated

Funds

Other

Property Taxes

The County’s “Two Hats”County-Wide Services

Courts and JailSocial ServicesCounty RoadsCounty Parks and Environmental Preserves

City-like Services for the Unincorporated Area (The “MSTU”)

Planning, Zoning, and Building PermitsSheriff’s Road PatrolLocal Streets and Sidewalks

The MSTU Budget• The population of the MSTU --

280,000 in 2006 --

is

larger than any of the cities in the county.

•MSTU services are paid for by those receiving the services, not by the general county taxpayers.

•MSTU residents pay communications taxes, but not utility taxes or franchise fees (unlike most city residents).

•The MSTU budget is about 11% of the County’s General Fund budget.

•Law Enforcement -

provided by the Sheriff –

makes up more than half of the MSTU budget

FY08 Capital Projects: $617.6 MillionFY08 Capital Projects: $617.6 Million

Sheriff, Courts, Public Safety

2%

Conservation & Resources

1%

Culture & Recreation

3%

Reserves / Other

1%

Enterprise

General Government

3%

Surface Water4% Transportation

23%

63%

•• General CIPGeneral CIP

Projects funded by the current Penny Projects funded by the current Penny for Pinellas Sales Tax and related revenues include:for Pinellas Sales Tax and related revenues include:

••Public Safety Public Safety Radio & Data SystemRadio & Data System••RoadRoad

Improvements (Improvements (BelleairBelleair

Bridge, Bridge,

Starkey Road, Keystone Road, others)Starkey Road, Keystone Road, others)••Major Major Storm DrainageStorm Drainage

and Flood Controland Flood Control

••Endangered LandsEndangered Lands

Acquisition Acquisition ••Park Park Improvements (Eagle Lake Park, Improvements (Eagle Lake Park,

Wall Springs Park, Pinellas Trail Wall Springs Park, Pinellas Trail extensions, others)extensions, others)

Capital Improvement Program (CIP)Capital Improvement Program (CIP)

•• EnterpriseEnterprise

Funded Improvements Funded Improvements include:include:

••Reclaimed WaterReclaimed Water

••SewerSewer

••Potable WaterPotable Water

••AirportAirport

Capital Improvement Program (CIP)Capital Improvement Program (CIP)

Tax Reform Fever

“Local Governments are Awash in Money” Where did the revenue growth go?

1. State/Federal revenue losses, cost shifts, mandates (“trickle-down” effect)

2. Higher than inflation cost growth(including new facilities like jails).

3. Steadily improved service levels (responding to citizen requests)

Example: 72% increase in Human Services funding since FY 2002 for indigent health care, mental health, homeless assistance, etc.

4. Increase of Reserve levels to External Audit recommended level (for coastal high hazard county)

Property Tax Reform

In 2007, the Governor and Legislature were determined to impose restrictions on local government property taxes For FY08: Property Tax Cuts and Caps for Counties, Cities, and Special Districts were enacted into lawFor FY09: Continuing tax revenue caps plus Amendment 1 was approved by Florida voters on January 29, 2008

● Eliminate non-essential program improvements 28.7$ ● Reduce administrative costs, non-direct services, 18.7

and pay-for-performance wage adjustments *● Reduce reserve funds to equal 15% of resources 12.2 ● Increase user fees approximately 10% 1.0 ● Reduce lower-priority public services 19.6

Total Reductions ** 80.2$ 292 positions were eliminated

* County employees DO NOT receive a cost-of-living adjustment (COLA)** Reductions from budget requests (which were targeted to 2% above FY07)

$ millions

FY08 General Fund Strategy to Balance the Budget

At 7% Below Roll-Back Millage Rates

FY08 General Fund Strategy to Balance the Budget

At 7% Below Roll-Back Millage Rates

Fiscal Year 2009

… And Beyond

-10123456789

10111213141516171819202122

1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009

%

Fiscal Year

Average Increase FY87 –

FY03: 5%

FY09 Estimate: 2% growth

Countywide Taxable Values Annual Rate of Change

Countywide Taxable Values Annual Rate of Change

January 29th

Referendum“Doubled” the homestead exemption (school taxes exempt)Save Our Homes portability (of up to $500,000 in value)10% cap on assessments for non-homestead property (school taxes exempt)A new tangible personal property exemption of $25,000

Estimated General Fund Budget Impacts

Doubling homestead exemption & Doubling homestead exemption & adding the tangible personal adding the tangible personal property exemptionproperty exemption

$ 29.3 million$ 29.3 million

Save Our Homes portabilitySave Our Homes portability Estimated Estimated $10 million$10 million

10% cap on non10% cap on non--homestead homestead propertiesproperties

unknownunknown

TotalTotal $40$40--$50 $50 millionmillion

Impacts on Other Ad Valorem FundsImpacts on Other Ad Valorem Funds Over $5.5MOver $5.5M

Property Taxes are the Largest General Fund

Revenue Source

Property Taxes are the Largest General Fund

Revenue Source

Property Taxes 70%

$407.1M

Property Taxes 70%

$407.1MRevenue Sharing &

Communications Tax 5% $29.3M

Revenue Sharing & Communications

Tax 5% $29.3M

Other 18% $106.1M

Other 18% $106.1M

Half Cent Sales Tax 7% $40.0M

Half Cent Sales Tax 7% $40.0M

What’s in the General Fund?The Sheriff: $ 278 millionOther Constitutional Officers: $ 66 millionHuman Services and Health: $ 71 millionOther Public Safety: $ 29 millionRoad and Building Maintenance: $ 52 millionParks and Environment: $ 41 millionComputer Operations: $ 19 millionEverything else: $ 65 million

FY 2008 Budget; excludes reserves

80%

Property Tax Cuts May Impact Many Non-Essential Services

Property Tax Cuts May Impact Many Non-Essential Services

Mandatory

Essential

Discretionary

Discretionary Cut Required

A $50 million reduction could require a 20% CUT in Non-Essential Services

FY08 Budget data

Board of County Commissioners Board of County Commissioners Strategic PlanStrategic Plan

Pinellas County Citizen Survey

70.0

70.4

71.6

71.9

76.3

66.0 68.0 70.0 72.0 74.0 76.0 78.0

Public Safety Services

Attracting /Retaininghigh paying jobs

Road Transportation /Traffic Flow

Improving water/sewertreatment methods

Promoting affordablehousing

Top Five County Funding PrioritiesRated on a scale “0 to 100”

Pinellas County Citizen Survey

7%

19%

22%

33%

36%

39%

44%

54%

0% 10% 20% 30% 40% 50% 60%

Taxes

Traffic congestion

Homelessness

Drugs

Too much growth

Crime

Road Condition

Lack of growth

Top Potential Major Problems

FY09 Budget Targets: 10% below FY08

BCC Departments

Customized reduction target amounts based on mix of mandatory and non-mandatory/administrative programs

Constitutional Officers and Independent Agencies

Submit budget requests 10% below FY08 Budget

FY09 Budgets: Finding the Right Balance

Reductions are to be based on programs and level of service

Focus on fewer high quality programs vs. many low quality programs

Consider alternative revenue sources and different ways of providing services

Tax Reform: More to Come?

The 2008 Legislature could pass new laws imposing more restrictions on property taxes

The Taxation and Budget Reform Commission can place proposed Constitutional Amendments on the November ballot

The Legislature could propose more Amendments for November

Citizen petition drives could place Amendments on future ballots

These new measures might limit expenses as well as revenues

“How Can I Make My Voice Heard on Budget

Decisions?”

Stay informedSend letters or e-mails to public officialsReview Your TRIM NoticeAttend Public Hearings for the County, School Board, City, and other Taxing Authorities

Vote !

•Budget Forecast & Requests: October

- March

•Elected Officials requests due May 1

•Board Budget Workshops: April, May, and June

•Proposed Budget to Board: early July

•TRIM Notices mailed by Appraiser: mid-August

•Legally Required Public Hearings and Budget Approval: September

•Tax Collector mails tax bills: November

Budget Calendar Fiscal Year: October 1 to

September 30

Information on the Pinellas County

Budget

is availableon theCounty website:www.pinellascounty.org

Information on the Information on the Pinellas CountyPinellas CountyBudgetBudget

is availableon theCounty website:www.pinellascounty.org

Questions?

Thanks for Your Attention!

ORGANIZATION COST SUMMARY (In Millions)

APPROPRIATIONS

County Administrator$1,335.8 – 65.8%

Budget Summary

Enterprise Services(Self-supporting Servicesfor Water, Sewer, SolidWaste and Airport)Governmental Services(Parks, Highway, EMS,etc.)

Total

$ 258.4

462.9

$ 721.3

Operating

$ 389.1

225.4

$ 614.5

Capital Total

$ 647.5

688.3

$ 1,335.8

ORGANIZATION COST SUMMARY (In Millions)

APPROPRIATIONS

Elected Officials$350.0 – 17.3%

Budget Summary

Board of County Comm.Clerk of the CourtCourt SupportProperty AppraiserSheriffSupervisor of ElectionsTax Collector

Total

$ 1.613.814.110.7

278.96.6

21.2$ 346.9

1.2

1.9

$ 3.1

Operating Capital Total

$ 1.613.815.310.7

280.86.6

21.2$ 350.0

ORGANIZATION COST SUMMARY (In Millions)

APPROPRIATIONS

Other$342.9 – 16.9%

Budget SummaryOperating Costs: $342.9Capital Improvements: 0

General GovernmentVoted Fire DistrictsRisk FinancingUnified Personnel SystemInformation TechnologyOther Voted Districts

Includes Independent and Special Purpose agencies such as:

-

20.0

40.0

60.0

80.0

100.0

120.0

FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07

$ bi

llion

s

Taxable Value Save Our Homes Exempt Value

Impact of “Save Our Homes”

Amendment

Without SOH Exemptions, the taxable value would have been 33% higher in 2007

••SheriffSheriff

road patrol ( road patrol ( 60%60%

of the MSTU budget)of the MSTU budget)••Local road repair and maintenanceLocal road repair and maintenance••Storm drainage maintenanceStorm drainage maintenance••Planning and zoningPlanning and zoning••Building and environmental permitting Building and environmental permitting •Code Enforcement•Additional Fire Hydrants• Recreation Initiatives•East Lake Library•County Connection Centers (partial funding)•Neighborhood Grants••Indirect costs to support these activitiesIndirect costs to support these activities

MSTU ExpensesMSTU Expenses

•• MSTU revenues include:MSTU revenues include:•• Property taxesProperty taxes•• Communications services taxesCommunications services taxes•• Permit feesPermit fees

•• Nearly Every City has Franchise Fees and Nearly Every City has Franchise Fees and Utility Taxes; MSTU has NeitherUtility Taxes; MSTU has Neither

•• A A StormwaterStormwater

UtilityUtility

could be created in the could be created in the future if the need arisesfuture if the need arises

MSTU RevenueMSTU Revenue

Penny for PinellasPenny for Pinellas Facts to KnowFacts to Know

••About About oneone--thirdthird

is paid by tourists and partis paid by tourists and part--time residentstime residents

••Provides a revenue source other than a property taxProvides a revenue source other than a property tax

••Necessities, such as groceries and medicines are not taxedNecessities, such as groceries and medicines are not taxed

••Only the first $5,000 on any single purchase (such as a car) Only the first $5,000 on any single purchase (such as a car) is taxedis taxed

••Improved roads, reduced flooding, increased safety, and Improved roads, reduced flooding, increased safety, and enjoyable parksenjoyable parks

••ItIt’’s equitable s equitable ––

everyone pays their fair share of preserving, everyone pays their fair share of preserving, protecting, and improving our communityprotecting, and improving our community

••Revenues from the Penny are Revenues from the Penny are restricted to capital restricted to capital improvement projectsimprovement projects

Penny for Pinellas Revenue Projections

Courts/Jails $80 Million N/APinellas County $673 Million 52.73%

Municipalities $603 Million 47.27%

Total $1.36 Billion

Current Penny (2000Current Penny (2000--2010):2010):

Penny Extension (2010Penny Extension (2010--2020):2020):

Courts/Jails $200 Million N/APinellas County $911 Million 52.33%Municipalities $830 Million 47.67%

Total $1.94 Billion