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Hernando Commission holds tax rate steady but dips into reserves to handle shortfall

 
Hernando County Courthouse DOUGLAS R. CLIFFORD   |   Times
Hernando County Courthouse DOUGLAS R. CLIFFORD | Times
Published Sept. 19, 2018

BROOKSVILLE — The Hernando County Commission voted this week to approve its 2018-19 budget. Commissioners held the line on the county property tax rate but had to suspend for one year the county policy of keeping an 18.5 percent general fund reserve.

A funding shortfall discovered several months ago, which led to the ouster of the former budget manager, prevented the county from keeping its agreed upon amount in reserves. Rising property values helped to narrow shortfall, but commissioners did not want to raise the tax rate and did not limit the requested budget increase of Sheriff Al Nienhuis, as they have in the past.

Commission Chairman Steve Champion questioned why the county's budget increased 2.7 percent but the Sheriff received a larger increase at 3.5 percent. He asked if Nienhuis would consider a compromise.

Sheriff's Office Col. Mike Maurer, Nienhuis' chief deputy, tried to put the increase in perspective. New money the Sheriff's Office makes by housing inmates from other jurisdictions is funding jail improvements, he said, money the county doesn't have to spend from its general fund.

"I feel like I'm the bad guy when I get up here and have to explain it to you, when you should be throwing confetti at me,'' Maurer said.

Throughout the difficult budgeting process, commissioners made clear they didn't want to cut popular services such as parks and libraries, but left open the possibility of taking a loan from the county utilities budget if cash flow becomes a problem in the coming months.

Without other ways to make up the shortfall, they had no choice but to let the reserve amount slip to 14.3 percent. Budget director George Zoettlein has warned over the years that reducing the reserve could bring criticism from the county's auditors. He repeated that concern Tuesday.

A lower reserve also could impact the county's bond rating, he said, which can increase the interest rate if the county needs to take out bonds for a pricey project.

County finance officials have long said that the reserve is needed not just for emergencies, but to maintain cash flow late in the year. Property tax revenues that fund county services and pay county employees don't start coming in until the middle of the fourth quarter, even though the county's new budget year begins October 1.

Commissioners praised Zoettlein for returning from retirement to help them with the budget crisis created when cash carried forward from last year's budget was over calculated and spending outstripped resources. He said he hoped to bring the county's reserve back to 18.5 percent by the end of the next fiscal year.

The commission needs to take the blame for the mistakes, said Commissioner John Allocco, but also pull together to demonstrate the kind of stable government that encourages economic growth. If that growth occurs, he said, the commission might be able to lower the tax rate in the future.

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The commission approved a total budget of $449.1 million and a general fund budget of $110.8 million.

The general fund tax rate will remain at 6.8912 mills or $6.89 in taxes for every $1,000 in appraised taxable property value.

Commissioners eliminated the half-mill tax to support the county's fire service, but raised the flat fire fee from $194.70 to $253.09. The net effect varies by property, but people with more valuable homes will pay less for fire services than they did last year.

The budget also includes an increase for county emergency medical services from .67 of a mill to .91 of a mill, or an additional 24 cents in taxes per $1,000 in property value. The increase is attributed to growing costs for prescription medications used on county ambulances and other operational increases.

Hernando County balances budget without a tax increase — despite prior shortfall

Contact Barbara Behrendt at bbehrendt@tampabay.com or (352) 848-1434.