Another decrease in valuations in 2012?

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January 19, 2012

As you may recall from last year, county property valuation fell 1.8%. This put pressure on the commissioners to raise the millage in order to avoid cutting spending. As it turned out, the final millage did result in a budget reduction of $7.9M or about 1%, helped enormously by the Legislature’s passage of pension reform that provided a county windfall.

This year, Legislative action will again impact county budgets. One way is through HB251/SB928, which changes the rules under which county property appraisers operate. Specifically, this bill would require consideration of “open market transactions..”, “.. including, but not limited to, a distress sale, short sale, bank sale, or sale at public auction.”

Although the proposed statue would give the local PA some discretion, it is likely to depress valuations. Palm Beach County Property Appraiser Gary Nikolits estimates this could be as much a 2% reduction in valuaion – good for the homeowner, but not so good for city and county governments. (See the Palm Beach Post Story by Jennifer Sorentrue: “Property values stable in Palm Beach County, but bills leave tax revenue uncertain” )

The 2012 adopted budget which is now available on the county website, states on page 2, “Following four years of decline, property values have begun to stabilize and are projected to be level for FY 2013.” More optimistically, on page 58 they estimate a 2013 valuation forecast of $125.8 B, a 1% increase. Maybe not.

In any case, expect another difficult budget year.