Increase proposed for Winter Springs’ tax rate

Clarification: An earlier version of this story did not clearly identify the proposed tax rate increase. It compared the proposed 2.62-mill millage rate to the “rolled-back” rate of 2.2394 mills to arrive at the “17% increase” figure. The “rolled-back” rate is the rate the city would need to reduce the current millage rate to, in order to negate the increased tax bills that come from rising property values, giving taxpayers a bill for the same dollar amount as the previous year. But Winter Springs typically does not roll its millage rate back to the rolled-back rate. Instead it tends to hold the line at the current tax rate, which currently is 2.41 mills. Because of rising property values, holding the millage rate steady causes an effective increase in property tax without increasing the millage rate number itself. The proposed millage rate increase is on top of that. Compared to the current city-levied millage rate of 2.41 mills, the proposed 2.62 mills would represent a 8.7% increase in the millage rate and, due to rising taxable property values, an effective rate increase of 17%. That does not take into account homestead tax exemptions, which limit how quickly property taxes can rise per year for homeowners who are exempt from the higher rate increases.

Winter Springs is looking to start its budgeting process Monday, July 15 and the interim city manager is requesting to increase the property tax rate. 

Interim City Manager Phil Hursh’s proposed budget includes an 8.7% increase in the city’s property tax rate, from 2.41 mills to 2.62 mills. That would roughly translate to an extra $21 in taxes for every $100,000 in a home’s value. Compared to the rolled-back rate of 2.2394 mills that represents an increase of 17% over the previous year.

In his proposed budget, Hursh wrote that the increase was needed because of increased costs the city is facing – most notably in the cost of labor. 

“As a result of Hurricane Ian, coupled with a national inflation rate exceeding 20% since 2020, the costs of maintaining a fully functioning city government have escalated,” Hursh wrote. “We have seen increases primarily in the areas of salaries and benefits, general liability insurance, and goods and services.”

The requested increase comes during a crucial election year for Winter Springs, where three city commissioners are on the ballot. Winter Springs Mayor Kevin McCann said the requested increase would still keep Winter Springs’ tax rate near the lowest in Seminole County.

But are other cities looking to raise tax rates? He said when he talks to leaders in the area, the answer is simply “not in an election year.” 

Currently, Seminole County is not proposing to increase its property tax rates. It’s not clear if other governments in Seminole County will ultimately propose tax increases. 

McCann said that one option would be to vote to set the maximum proposed millage at 2.62, and city commissioners could ultimately approve a lower millage rate when they finalize the budget. 

The downside of that? Homeowners would get a notice that the proposed maximum is going to increase, which would likely generate controversy even if, ultimately, the city doesn’t increase taxes.

“There are some consequences to that,” McCann said. “What will be the direction, what will be the feeling of the Commission? Do they need more time?”

Interview requests to city staff and commissioners were not returned before our publishing deadline. Winter Springs will hold a budget workshop at 4:30 p.m. Monday, July 15. The City Commission will then hold its regular meeting at 6:30 p.m., and the city could adopt the proposed maximum millage rate at that meeting. 

The city must get its maximum rate to the property appraiser by Aug. 4. 

Once the maximum rate is approved, the city would have two more public meetings to finalize the budget. These are scheduled for Sept. 9 and Sept. 23. 

View the agenda for Monday’s meeting here and find the recording of the meeting afterward on the same page. 

Even though the city manager is requesting a tax increase, the city’s 2024-25 budget would actually be smaller than the year before. The total proposed budget for all city funds is about $68.3 million; that’s $4.4 million, or 6%, less than the year prior. 

One big reason for a smaller budget is because of uncertainty with the local option penny sales tax. Voters in November will decide whether to continue the penny sales tax for another decade. Winter Springs is only budgeting to receive the sales tax revenue for three months at $250,000 per month. 

 In an email to city commissioners, Winter Springs Mayor Kevin McCann said the city has a number of options it can choose, but ultimately the city needs to get its maximum proposed rate done soon. 

“The Commission and city staff have a great deal to accomplish in the next 3-4 weeks,” McCann wrote. “The city staff and I are committed to supporting the Commission by providing all necessary information (including private meetings if desired) in order to make an informed decision.”