Property valuations: Uptick good news, officials say
The 7.75 percent increase in taxable property valuation in Cape Coral is great news for the city as well as people selling homes in the city, officials said this week.
For the city, it increases the amount of money it can collect in ad valorem taxes and gives the city more options, something officials say is crucial at a time when the millage rate could come down once the new budget is passed.
For the housing industry, it means the recovery from the housing bust is in full swing, with values coming back closer to what they were before the downturn.
Gloria Tate, a Realtor at Raso Realty and former city council member, knows the impact from both sides. She said the numbers are outstanding news for the citizens.
“It will help the council meet its promise to lower the millage rate (.75 mills) without having to sacrifice anything else,” Tate said. “They can do capital project planning like they wanted to.”
Councilmember Rick Williams said the valuation news is nice to see, especially since new residents are starting to come to the city.
“It will also help us with the budget. I don’t think people are going to see that much of an increase,” Williams said. “The millage rate is going to be adjusted, so the impact won’t be so bad.”
Williams said the city used 6.1 percent as the expected valuation increase. The preliminary estimate Lee County Property Appraiser Ken Wilkinson gave last month was 6.01 percent.
According to city spokesperson Connie Barron, the difference represents a roughly $1.2 million in additional revenue for the city, which is about a tenth of a mill.
“This gives the city options to pick and choose. We were going to use some of our fund balance,” Barron said. “Now we can do an extra project or capital improvements or even apply it further to the mill rate.”
City Manager John Szerlag said in his proposed budget the extra $1.2 million has been slated for the general fund balance.
“The current year’s budget utilizes about $5 million of fund balance. By using the extra money for the fund balance, it will lower our reliance on the fund balance to $3.8 million,” Szerlag said.
The city council can modify that by using the funds for capital improvements such as new vehicles; enhance current programs such as street paving and lightin; or lower the millage, Szerlag said.
The millage rate is expected to drop from 7.707 to 6.957 when the new budget comes into effect as part of Szerlag’s “three-legged stool” of financial diversification. The other two “legs” are a public service tax on electric bills and a fire assessment that allows the city to fund a portion of department operations previously paid for with property tax revenue with new tax dollars.
One mill is equal to $1 per $1,000 in taxable valuation.
Taxable property valuations countywide, Wilkinson estimates, for the 2015 tax bill are higher by 7.56 percent over 2014.
On the real estate side of things, thanks to help from Preserve the Cape and others, real estate values have come up because, Tate said, that’s what a sustainable city needs.
While home buyers may not be happy about the home they wanted for $200,000 last year that now costs more than $216,000, Tate said the market has turned in favor of the seller and created a spiral upward.
“Prices have gone up, but at the same point the good news is mortgage rates have stayed the same, jobs are back since there’s more building, and people can buy more house,” Tate said. “It’s like a cycle we create and the city becomes stronger and that’s the key.”