IRB'S FINANCIAL PERFECT STORM

Financial Perfect Storm Force #2:

DECLINING HOME VALUES

[This is the second in a series of three postings written by

IRB resident Kelly Cisarik on the subject of IRB's impending

"Financial Perfect Storm."]

Aside from the declining “Penny for Pinellas” revenues mentioned in yesterday’s posting, the second of the three forces fueling IRB’s “Financial Perfect Storm” are declining homes values hitting tax revenues from non-homesteaded properties.

On January 28, 2009, the Standard & Poor’s Case-Shiller Index for home prices came out for November 2008. This is the latest data available from the most-respected source in the industry.

The year-over-year declines were 21% for the Tampa market. This number gives us a real good indicator how much of a decline we have in the Pinellas County home values. In Indian Rocks we have a large percentage of condos held as second homes, so this decline in value could end up higher than 21% in our city. We’ll see what our new property appraiser comes up with.

This decline in values directly affects IRB’s tax revenue for non-homesteaded property as of the Jan. 1, 2009 tax roll. The lowered assessed values will show up in the August 2009 TRIM notices. At that point, the IRB City Commission will be forced to decide whether last year’s 36% tax increase was enough or whether they want to increase taxes again. A third option would be to make significant cuts to spending but, to date, the commission has not leaned in this direction.

CLICK HERE for S & P’s Case-Shiller Home Price Index

Kelly Cisarik
IRB

Tomorrow: IRB Financial Perfect Storm Force #3

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