Property Values Plummet

After two years of small bites, county taxing authorities will feel the full course from the economic slowdown this year.

The taxable property roll just certified by county Property Appraiser Kesley Colbert reflects a 24-25 percent drop in county property values on which local governments will provide the multiplier for taxing purposes.

The county experienced value drops - the first in county history - each of the past two years, but those drops were in the single-digits, percentage-wise, between 4 percent and 8 percent.

This year's fall in taxable property values is the largest in the county's history.

"It's not unprecedented to see a 24 percent change," Colbert said. "It is to see a 24 percent drop. But it has gone up by 36 percent before, just a few years ago. The process we use is the same every year, but we never heard much when things were going up by 36 percent. We are doing the exact same thing as when values were going up.

"This is the first big drop we have had like this. We knew it was coming. We are always in arrears. We could see values were dropping off. We could see that downward trend."

When Colbert speaks of always working in arrears, he is noting that the property appraiser must base his final certified numbers on what property values were on January 1 of any given year.

He or she can not use any transactions that have taken place in 2009 when figuring the 2009 taxable roll. What the certified roll effectively is a snapshot of county property values as of the first day of the year.

Further, the appraisal numbers are market driven. A property appraiser must use arm's length real estate transactions to determine just value for a property.

And it is important to remember in these difficult economic times, that bank sales or foreclosure sales do not impact taxable property values because they are not considered arm's-length sales.

"The problem is the lack of sales," Colbert said. "This has been a most difficult year because of the lack of volume of sales. From 2000 to about 2004, when there were hundreds of sales every week, it was easy. Now, there are maybe two sales per week out of Gulf County.

"If we keep having enough of them (bank or foreclosure sales) they could become the market."

Further, the trend for land sales, where they have occurred, has been somewhat scattershot, Colbert said.

Gulf-front property has not dropped as significantly, say, as gulf interior property. The drops in property values in Dalkeith and similar inland areas were not as significant as along the coast and southern areas of the county.

"The sky hasn't fallen," Colbert said. "It is still land in Florida that will be desirable again. Just because there were few sales doesn't mean the value isn't there.

"I'm not here to placate anybody, I'm not here to hit a number. I'm here just to reach fair value."

The process, whether in a year that sees a 36 or more increase in property values or a 24 percent decrease, remains the same - examine the market and apply the best appraisal experience, education and instincts to arrive at that just value.

"We try to go to the gulf front, look at sales and try to make the best estimate on the value of that property on January 1, 2009," Colbert said. "We move to gulf interior and do the same thing, then into the city of Port St. Joe and do the same thing and on and on for more than 17,000 lots.

"We are trying to determine the value of the land. We are not trying to reach a number."

Colbert said small counties can be impacted in tough economic times unlike larger counties with broader and more diversified business sectors.

Larger counties, such as neighboring Bay, has a host of McDonald's and Burger Kings and Lowe's that provide something of a corporate and business-structure buffer against the vagaries in property values.

"In small counties, about all we have it land values," Colbert said. "We don't have that constant of businesses and corporations, as anybody who looks around can see.

"So when property values drop taxable values go down. It's no surprise we are going down. It is going down everywhere."

Neighboring Franklin County's certified tax rolls also reflect a 20 percent drop in values.

This was also the first year in which property appraisers had to factor in a 10 percent cap in assessed values for properties without homestead exemption - aimed at assisting businesses, rental units and second home owners.

Colbert said the new cap at little impact this year, accounting for maybe 2 percent of the total drop in taxable property values, but said the 10 percent cap will be more of a factor as economic dynamics arc upward.

"That cap does not impact us much now, but when things start turning around, that cap will affect us because there won't be that growth we saw in the past, like the first part of this decade," Colbert said.

Further, Amendment I, a property tax relief measure approved by voters several years ago, takes many of the county's small businesses off the tax rolls because the amendment provided an exemption from taxation for the first $25,000 in personal tangible property.

Colbert said the state Department of Revenue understands the situation and has taken an effective approach to the auditing of the tax rolls of individual counties.

Colbert must come within a few percentage points, 3-5 percent, of what the state believes the taxable property values should be for the county.

"The people who audit us know the economic situation," Colbert said. "The state has shown some pretty good sense about what is going on in the market.

"I don't have to convince anyone the market has gone down. Everybody knows the economic situation."

The reality for county taxing authorities is in stark black and white.

For the county, where a one mill - a mill equals $1 for every $1,000 in tangible taxable property value - brought in $2.6 million last year, that mill will be worth $1.9 million this year.

The school district, for which certain homestead exemptions given to seniors and others are not factored into the final equation, that mill that brought almost $2.1 million last year will mean $2.0 million this year.

The city of Port St. Joe realized a drop in taxable property values of more than $100 million - the mill that brought in $449,000 last year will bring in $346,000 this year - and the city of Wewahitchka lost more than $77 million in taxable property value, meaning one mill will be worth $60,000 this year after being worth $77,000 last year.