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Tax rate cut for upcoming budget year?: Cape officials weigh property valuations bump

By Staff | Jul 6, 2017

Overall taxable property valuation in Cape Coral is up 9.57 percent over last year and so, for the fourth year in a row, the city may consider a reduction in the millage rate for its operating budget.

This is five straight years of increasing value for city property owners, which translates to more revenue for governmental agencies to consider in the final stages of preparing budgets.

City Manager John Szerlag annually estimates a 6 percent increase when preparing his initial budget until Lee County Property Appraiser Ken Wilkinson releases preliminary property tax values in May and again on July 1. Last year he proposed a .207 mil rate reduction that produced a final rate of 6.750 mils for the current budget cycle.

Szerlag was not in his office this week and unavailable to comment on behalf of the city on the new valuation.

The millage rate stood at 7.957 in 2013 and has been followed by reductions each of the past four years.

“The property value increase, obviously, brings more money to the city,” said Councilmember Rick Williams. “I hope the council won’t take all of the money going forward because we need to take care of the taxpayer. I think we can seriously go to the rollback rate. It’s close, but I think we can pull that off. I’m confident we can do that again this year.”

It’s not just in the Cape. Values are on the rise countywide, too, with overall property valuations up 8.94 percent over last year, including all commercial and industrial properties in addition to residential.

“It’s fabulous for the Cape to have a steady increase in values,” said Councilmember Rana Erbrick. “It would bring in more money if we were to keep the tax mill rate level, but I am comfortable looking at the rollback rate this year. It’s been time for the rollback the past couple of years, but it really is time to do it this year.”

The rollback rate is the tax rate at which revnue to the city would remain flat.

“I have not seen the numbers yet so I don’t want to commit to anything yet,” said Councilmember Jessica Cosden. “I’m not surprised by the increase in values with all that’s going on here.”

Szerlag’s total budget proposal for 2017 was nearly $670 million. The General Fund includes ad valorem taxes as its main revenue source and is used for police, fire, public works, parks, planning, community development and administrative services. The city also gets revenue from its Fire Service Assessment to offset some of those costs to the General Fund and Public Service Tax. The rate for both of those will be included in Szerlag’s proposed budget and could be adjusted through public hearings until final budget approval.

Wilkinson uses the most recently released preliminary value numbers to calculate a rollback millage rate so the taxing authorities will know the rate at which they will receive about the same revenue as the previous year.

The city use those rates to certify to the appraiser’s office the millage rate they want to use before the TRIM (Truth In Millage) notices go out in mid-August. Fiscal Year 2018 budgets go into effect on Oct. 1.

Property owners have 25 days from receiving the TRIM notice to resolve any disagreement in value with the property appraiser. The annual process is complete when tax bills start arriving in property owners’ mailboxes in November. Taxpayers then have five months to pay their bill with a discount.