ORLANDO, Fla. – June 3, 2008 – Downtown Orlando’s burgeoning skyline may keep tax bills down for property owners in Orange County, but residents elsewhere in Central Florida aren’t so lucky.

Preliminary estimates of the 2007 tax base show that most local governments will be forced to raise tax rates or further cut spending.

“It’s the most depressed market I’ve seen, and I’ve been in the mass-appraisal business since 1973,” Volusia Property Appraiser Morgan Gilreath said. The good news, he said, is that the forces that caused the real-estate bubble and crash have diminished as a factor – and that “the remedies are in the process of being put in place.”

The tax base – the total value of all the property that can be taxed – dipped dramatically in some areas because of the cooled real-estate market combined with tax cuts approved by voters in January.

Throughout the region, cities and counties fat with business and industry fared the best.

Suburban towns packed with homeowners experienced sharp declines in their tax bases, in part because of tax reforms aimed at helping Florida residents who live in their homes.

In Orange, $5 billion in new construction helped offset a 12 percent decline in house values.

“It was really a whiz-bang year for commercial,” Orange County Property Appraiser Bill Donegan said.

The metro area’s largest county will not see that kind of boost from construction next year, he added.

Each Central Florida county had a different story. But overall, condominiums – particularly those converted from rental properties – suffered the greatest loss of value.

“There were a lot of incentives being given out to first-time buyers, and maybe people were a little too generous on incentives,” Seminole County Property Appraiser David Johnson said.

“We’re seeing a lot of people dumping houses. We also saw the impact of investors – people buying two or three units thinking they were going to flip them.”

Copyright © 2008 The Orlando Sentinel, Fla., Mary Shanklin. Distributed by McClatchy-Tribune Information Services.