I n late July, the Lake County Board of County Commissioners voted 4-1 to increase the property tax millage rate by 18 percent to fund raises for county employees, the purchase of new vehicles, expansion of parks and more money for the Lake County Sheriff’s Office.
Commissioner Leslie Campione was the only “no” vote, and she cited concerns for struggling homeowners, especially seniors. There is little doubt that homeowners are already struggling to stay out of foreclosure and seniors will be hardest hit.
Many residents don’t understand millage rates and how they are calculated for property taxes. A millage rate is the amount of tax charged per $1,000 of property value. For 2014, Lake County’s millage rate was $5.94 per $1,000 in property value. The proposed millage rate would increase to $7.06. Under the higher rate, a senior with homestead exemption who owns and lives in a home valued at $165,000 would see their property taxes increase $130 per year.
The impact is worse for renters because they do not receive a homestead exemption. Someone renting a home valued at $165,000 can expect their rent to increase $185.46 per year. In addition, those who rent do not receive tax deductions for mortgage interest and property taxes paid.
Lake County residents will incur more costs as a result of the property tax increase, as local businesses will be forced to raise prices to offset higher taxes. Struggling businesses may be forced to close while vacant buildings remain unoccupied. Small businesses with limited resources will face the biggest challenges on higher property taxes.
Some may argue that overall a property tax increase of a few hundred dollars is not a huge burden for most residents. However, the choices are far more difficult for residents on fixed incomes. The decision comes down to whose priorities are more important. Are Lake County government’s needs and employee raises more important than its residents, homeowners and businesses who are struggling to survive the Great Recession?
During the presentation, Lake County Manager David Heath pointed out that with a 4 percent-per-year increase in property values, Lake County would still be short in revenues covering the budget for the next 10 years.
This indicates two problems. First, the 18-percent increase this year will not be the last one imposed by the Lake County Board of County Commissioners. Second, it appears Lake County has more of a spending problem than a taxing problem.
Two more public meetings will be held with Lake County residents to discuss the proposed property tax increase. Both meetings will begin at 5:05 p.m. on Sept. 9 and Sept. 23 at the Old Lake County Courthouse, 315 W. Main St., in Tavares.
Homeowners, renters and business owners are encouraged to participate in the public hearings to ensure everyone is in agreement with such a large property tax increase. If final approval on the proposed property tax increase occurs in September, every homeowner can expect to start paying more on Jan. 1, 2015. This is a big issue!
Don Magruder is the CEO of Ro-Mac Lumber & Supply, Inc., and he is also the host of the “Around the House” Radio Show heard every Monday at noon on My790AM WLBE in Leesburg.