Pasco County has taken a pulse on its economy and the prognosis is good.
Pasco County Budget Director Robert Goehig gave the Pasco County Commission an overview of the county’s economic conditions, as the board prepares to make decisions for the county’s 2024 budget.
He began his presentation this way: “We’ve all heard the horror stories out there, ‘There’s going to be a recession, there’s not going to be a recession. There’s going to be an economic downturn, there won’t be an economic downturn.’
“One thing we know is that with the exception of the wild swing in the economy at the beginning of COVID, the economy has been growing at about 2% per quarter for the past 10 years.
“We expect that trend to continue for the near upcoming future and if there is a recession, we believe that our area, because of the growth in our region, we are much more able to withstand the negative impacts of any recession — more so than other areas of the economy.”
That being said, Goehig said Pasco isn’t immune to increased labor costs resulting from record-low unemployment rates and higher costs due to inflation.
The region’s inflation rate is 9.6%, which primarily affects health care, energy, vehicle and construction costs, Goehig said.
On a brighter note, though, “tourism is back to where it was prior to the pandemic,” he said.
That’s important in Pasco because about 12% of the county’s sales tax revenue is generated by visitors to the county, he said.
The county’s building activity remains strong.
“We are at record highs in our building permits and for that reason we are expecting the 2024 taxable values to be at, or a little below, where they were in 2023.
“As you can see, in 2023, taxable values increased by 16.7%,” Goehig said.
This year, the county expects the increased values to be between 12% and 16%.
“In 2023, new construction was at an all-time high, even higher than 2008,” Goehig said.
“We are expecting that to reduce to kind of the average. We are not expecting this to stay at this very high level forever. And, we’re certainly not expecting it to drop off like it did during the Recession.”
For planning purposes, if the county’s taxable assessed values increase by 12%, that would yield an additional $35.5 million in property tax revenues, the budget director said.
Of that, portions would go to the Sheriff’s Office, the Community Redevelopment Agencies and for transportation improvements.
Once those are subtracted, the county would have about $18.4 million for new initiatives and to address budget increase requests from the county’s constitutional officers.
If the county’s values increase by 16%, the board would have about $25 million in additional property tax revenues, Goehig said.
He also gave the board an overview of expected revenues from the half-cent sales tax, Penny for Pasco and Local Option Fuel Tax revenues.
The half-cent sales tax and Penny for Pasco are expected to have increased revenues in the 5% to 6% range. The Local Option Fuel Tax revenues have been growing at a rate of about 2% a year and that trend is likely to lessen as more electric vehicles hit the road, Goehig said.
As it builds its budget, the county must allocate more funds for personnel that will be needed at the expanded jail, a new library and new fire station. Plus, it plans to take over the Wiregrass Ranch Sports Campus, which has been operated by Radd Sports.
So, while more revenues are expected to come in, the county’s administration is recommending that spending in the 2024 budget is divided between new initiatives and capital spending.
The capital spending would address existing needs and it can be pulled back, if the county needs to make an adjustment, Goehig said.
In essence, he said: “We’re entering into the 2024 budget year optimistic, but we want to stay agile, in case there is a recession or something comes up that we need to respond to.”
The county board is expected to have a workshop on May 16 to discuss the upcoming budget in greater detail.
Pasco County’s 2024 budget outlook
Key expense drivers for Pasco County’s 2024 budget
- Increased operating costs for expanded jail
- Opening of a new fire station and a new library
- Assuming operations of Wiregrass Sports Complex
- Increased Medicaid costs
- Increased employer-paid health care and retirement costs
- Increased property and worker’s compensation insurance costs
- Increased employee compensation costs
- Inflationary impact on costs of health care, construction materials and vehicles
- Expect growth of at least 12% in taxable assessed values, putting the county in a good position for the 2024 budget year.
- Expect record growth trends to slow at some point, so county administration recommends a spending plan that splits new revenues, new initiatives and capital spending.
Source: Pasco County Budget Director Robert Goehig’s economic outlook
Published March 15, 2023