[Villages Kahuna]

Property taxes are assessed in arrears. The basic procedure is that the county commissioners agree on a County budget for the upcoming year. That budget includes the costs of roads and infrastructure billed to the county by the Developer. Those costs don’t necessarily represent the total cost of the roads and other Items of infrastructure which the Developer has deemed necessary for the planned continued residential and commercial development. In the past there has been little, if any, negotiation between the Developer and the commissioners, who represent the taxpayers. The Developer would propose how much he intended to pay to fund the infrastructure and the balance would come from tax revenues. There weren’t arms length negotiations between the parties resulting in the need or adequacy of the proposed roads and other items, or how much of the cost would be borne by the Developer and the taxpayers. Those numbers were simply proposed by the Developer and approved by “his” County commissioners.

Once that process was complete, the commissioners could arrive at the assessed valuation of the property to be taxed and the millage (rate) required to balance the proposed County budget.

What changed in late 2019 was that the Developer proposed (in private) that the planned roads and infrastructure which he deemed necessary in the south end of The Villages, after the amounts the Developer proposed should be his responsibility, would require increased property tax revenues in an amount up to 25%. That tax increase was approved by the five incumbent county commissioners. All those commissioners were long-term office holders and all had almost certain conflicts of interest between their relationships with the Developer and their responsibility to represent Sumter County residents and property owners.

That process began the campaign by three individuals to run against three of the incumbent commissioners who approved the 25% increase in the November, 2020 primary and general elections. Their fundamental campaign plank was to roll back the tax increase, shift more of the cost back to the Developer, and establish a more arms-length process for establishing a County budget and the means for financing it. The incumbents were defeated by landslide margins in those elections. The other two incumbent commissioners will run for re-election of their staggered terms in the 2022 elections.

Earlier this week the newly-elected commissioners in fact did vote to roll back the previously-approved property tax increase as well as establish several new impact fees to be paid by the Developer. In Tuesday’s front page article The Daily Sun described the new impact fees as “tax increases”, but they made no mention of the 25% tax rollback, which of course is a tax reduction.

So that brings the situation up-to-date. The first portions of the 25% increase would have been assessed to balance the proposed 2022 County budget based on the assessed valuation of taxable property as of the end of 2021. As the result of the rollback the County budget cannot be balanced totally with property tax revenues. There will have to be a combination of other budget reductions and revenue sources identified in coming months.

So, if some taxpayers incurred large increases in their 2021 tax bills, it was not the result of the 25% increase authorized by the county commissioners in late 2019. The authority for those tax increases has been overturned by the new commissioners. Impact Fees payable by the Developer were simultaneously passed. But the impact fees are insufficient by themselves to balance what is likely to be a 2022 County budget. Significant amounts necessary to balance the 2022 budget will have to come from some combination of spending reductions (including roads and infrastructure), further contributions by the Developer, and increased property taxes deemed appropriate by the commissioners.

Public finance and taxation is complicated. There are complicated, arcane laws, regulations, requirement s for public disclosure, hearings, etc. Hopefully, this post simplified things a bit and TOTV readers have gotten this far.