Citrus County commissioners today dipped their collective toes into next year's budgetary waters, and found there were varmints there to nibble at their digits.

This will be the fourth budgetary year that diminishing property values have caused a decline in revenues so vital in running the county's services and functions.

The tone of the workshop was set by County Administrator Brad Thorpe, who told commissioners, "The day of reckoning is coming soon, and eventually we're going to have to decide either to increase our revenue or reduce our programs."

At today's workshop, Property Appraiser Geoff Greene and Budget Director trotted out their figures for commissioners to consider. Greene also brought some bad news from his recent trip to Tallahassee - property value taxes could be capped even further by the state Legislature from the current 10 percent down to 3 percent and then put on a statewide ballot in 2012 before enactment. And Taylor pointed out just how much the current values have harmed revenue collections across the board in the county's functions.

Greene told commissioners that, from the national perspective, Florida in the fourth-quarter of 2010 remained one of the hardest-hit states in terms of declining home prices. In terms of the state and regional perspectives, the Florida economic recovery timeline shows a minor recovery through 2011, with sustainable recovery forecast for 2012, Greene said.

Even so, Florida is expected to lag behind other states in terms of economic recovery, Greene said. He added that Florida is still leading the nation in terms of foreclosures, just beating out Nevada. Greene also said that foreclosure filings appear to be bottoming, and that Citrus County is in the mid-range of foreclosure rates in Florida.

Greene's deputy, Les Cook also noted that 51 percent of all foreclosures are in just five states, which includes Florida. "That's Nevada, Arizona, Florida, Michigan and Illinois," Cook said.

Existing home prices are flat statewide, Greene said. The price of a median home is $133,000 in Florida, and $98,000 in Citrus County. In terms of the market values over a two-year period, Citrus County is down 22 percent, on average, Greene said, representing an almost 40 percent drop in overall revenue.

Budget Director Taylor noted that, statewide, property taxes collected by Florida counties have been reduced by $2.5 billion since Fiscal Year 2006-7, representing a decline of 21 percent. This year, counties face a further 6.5 percent reduction in ad valorem levies.

The county's budget for Fiscal Year 2011 is $230,722,722, Taylor said. Of special concern, she said, were the general, fire and library funding in the budget, which are all supported by ad valorem taxes.

The current countywide millage rate, which funds the Health Department, the General Fund and Road & Bridge Fund, is now 5.7299 mills. Taylor said that if the Legislature caps property value taxes at 3 percent, the county will lose $1.8 million in ad valorem revenues, Taylor said.

To meet the shortfall, Taylor suggested a number of options.

Using an average Single Family Home Value of $111,600, with a $50,000 homestead exemption as an example, Taylor said that home would have a taxable value of $61, 600. Options available to the county commission could increase the current countywide millage rate for that home of $352.96 to anywhere from $363.88 to $403.10 (or, a range of from $7.94 to $50.14).

Library Services collected $2,820, 602 in ad valorem revenues, and then $3,693,937 in FY 2006-7. But since FY 2006-7 ad valorem collections have been steadily declining, and the collections totaled $3,008,966 in FY 2009-10. The median $111,600 Single Family homeowner with a $50,000 homestead exemption could, if approved by the county commission, seen an increase from the current millage cost increase of between 43 cents to $1.42, depending on which option the commission chose to approve.

Fire Rescue Services collected $3,694,266 in ad valorem revenues in Fiscal Year 2005-6 to a high of $5,262, 036 in FY 2007-8. Since that time, however, Fire Rescue Services has dropped in revenues to $4,220,361 in Fiscal Year 2009-10.

The current millage rate of .4566 will not generate enough revenues to balance the department's budget, which is about $1 million short. Taylor suggested that a millage rate of .6195 would be needed to balance that department's budget, which will generate $5,500,000 in revenues from the Fire Taxing District levies.

Projected revenues for Fiscal Year 2011 are $69,088,120, and projected expenditures are $76,174,07, which leaves a FY 2012 projected fund balance of $13,556,953. That's down from a fund balance in FY 2010 of $21,934,899 - or $8,377,946 less in FY 2011 as in FY 2010.

No decisions were made at the workshop, and none were expected, since this was the initial look at the budget. But commissioners know what's ahead based today's workshop discussions.

"What we have to do I think, as a county, is to prove to the public that we as efficient as we can be in the things that we are doing," Commissioner Joe Meek said. "And once we've had that discussion, (then) we can have (a) second discussion of we either need to reduce our costs - cut this or that program - or increase our revenue."

Commissioner Winn Webb said he was concerned about the effect any changes the county might have on the average Citrus County household. "Make no mistake about it - we've got people out there who are out of work. Gas prices being what they are, how do you go looking for a job when you're paying $3.50 for a gallon of gas?' Webb said it's also tough for retirees living on fixed incomes who haven't had a cost of living increase in two years.

Webb also noted that gas prices affect everything in the state and county. "Gas prices are critical at this point, and unless the federal government does something fairly rapidly, we're going to see higher gas prices than we're seeing right now," Webb said.

Commissioner J.J. Kenney said the budget should not be balanced on the backs of county employees. "Let's try to find alternatives to making any more personnel cuts (or) we're going to see a decline in the services we're providing to our citizens," Kenney said.