August 9, 2019 12:00 p.m.
The City Commission is currently working to complete the 2020 budget. The budget was initially presented to the City Commissioners during the week of July 22. A summary of the proposed budget was then presented the following week (July 30) when the City Commission established the tentative millage rate. The proposed millage rate utilizes the same operating millage rate as this year’s levy (5.8553) but also adds an additional 0.5000 mills for the purpose of land conservation, thereby increasing the operating millage to 6.3553.
Let me specifically clarify that although the proposed land conservation millage (which was not formally endorsed but the City Commission until the development of the budget), the revenues generated by the additional half-mill will be transferred and sequestered in the City’s Land Conservation Trust Fund. The subsequent use of those funds is specifically restricted as indicated in the ordinance that created the Land Conservation Trust Fund: the acquisition of land for conservation, including associated costs such as surveys, title work, and environmental assessments.
By setting the tentative millage rate at the same rate and adding the conservation levy, the amount of tax revenues available to the City will increase by approximately twenty-four percent. I have received several messages voicing concern about the impact of a twenty four percent increase, with the author mistakenly believing that individual property owners’ tax bills will increase by twenty-four percent. Let me share a piece of recent correspondence and my response.
She wrote: “I just learned of the proposed 24% tax increase. On top of last years increase this is significant. This is way to much of an increase to absorb for most people. Fiscal responsibility people. No new taxes!! And a mileage for conservation too! It’s to much all at once. You all need a better money manager. Respectfully, [Property owner]….I was hoping to retire here. That may not be possible. It makes me sad.”
I responded with the following: “Good morning. Thank you for your outreach effort to learn more about your taxes. I have attached to this correspondence a copy of 2018 tax bill (prepared by the Nassau County Tax Collector). When reviewing the tax bill, please note the two lines that have been highlighted: these are the only two lines that are associated with the City of Fernandina Beach. All other lines are the result of either State, Regional, County, or Board of Education agencies. As you can see, of your entire $2,806.92 bill, approximately $830 is attributable to the City of Fernandina Beach.
“The taxes owed are a product of the millage rate (see the left side of Column 3) and the Taxable Value of your property (shown in the lower right corner as $138,105). For example, by multiplying $138,105 by the Fernandina Beach tax of 5.8553 mills (0.0058553), the tax due is calculated: $808.65. As tentatively set by the City Commission, the millage rate for 2019 is the same 5.8553 mills with an additional one-half mill for conservation purposes, thereby increasing the operating millage to 6.3553 mills.
“The other tax levy associated with the City is the Voter Approved Debt (0.1929 mills): this levy is calculated according to the amount of principal and interest payments due for the debt that was originally approved by City voters to purchase the property commonly referred to as the Egans Creek Greenway. That debt will be paid off in two years.
“The tax bill illustrates that the Market Value of your property increased from 2017 ($132,162) to 2018 ($138,105)- an increase of approximately 4.5%. Since you do not claim your property as a homestead property, the Market Value, Assessed Value, and Taxable Value of your property are identical. For the purposes of now calculating what your 2019 City taxes will be, let me assume that the value of your property increased another 5% in 2019 to $145,010. At that value, your City-associated taxes would be $921.58 (operations millage of 5.8553 and the conservation millage of 0.5000) plus $24.41 (voter debt service), totaling $945.99, representing an increase of 13.7%, or $110.70. Of that $110 increase, $72.51 is directly attributable to the introduction of the new land conservation levy. Without that levy, your City property taxes would increase only $38.19, an increase of 4.7% (ironically mirroring the hypothetical increase in your property value).”
One very key point to make is that although the example above utilizes an increase in property value of 4.5%, if you have secured the homestead exemption for your property, the increase in Assessed Value is limited this year to 3% (even if the Market Value of your property increased by more).
I encourage everyone to review their property appraisals and tax levies to understand how the total property tax bill is prepared. It is also crucial to understand how other agencies’ millage rates (Nassau County and Nassau Schools) affect your tax bill. If you have any questions, please contact me.