Earlier this month we discussed how the Florida Legislature doesn’t tell the truth about taxes when it comes to money for education. Today, our Truth in Taxation class looks at local governments.
Fortunately, state law demands a fair amount of truth-telling when it comes to what cities and counties will ask of their taxpayers, which in practical terms means those who own property valued at more than $50,000. Those whose homes are valued at less than $50,000 pay nothing in property taxes because of the homestead exemption of the same amount. Renters, of course, pay no property taxes.
For cities and counties, the new fiscal year starts on Oct. 1. In July, cities and counties must set a maximum tax rate for the next year, based on their budget discussions to that point. They may set a lower rate after further discussions and public hearings, but the rate can’t go any higher. That is why tax notices going out in August will show, among other things, how much you can expect to pay if no changes are made to an agency’s budget.
But just because a city or county doesn’t “raise taxes” doesn’t mean that property owners won’t pay more. Confused? Here’s the explanation.
Property owners pay taxes based on a “millage rate,” with each “mill” meaning $1. In Boca Raton, for example, the millage rate for the current budget year is 3.4216. Multiply that by every $1,000 of assessed value, and you can see how much you pay. If your home is valued at $400,000 – after deducting that $50,000 homestead exemption—you pay $1,368.64.
Not all cities, though, have such a low rate. Boca Raton isn’t just the second-largest city in Palm Beach County; it’s the city with the most expensive tax roll. Even in revitalized Delray Beach, the tax rate is more than double that in Boca —7.1992. The owner of that same $400,000 home in Delray pays $2,864.44 in city taxes because the city’s tax roll is 60 percent lower than Boca’s.
(To make things more confusing, that tax rate is just for the operating budget—police and fire, parks and recreation, etc. Cities and counties also can levy a rate of as much as 2 mills for debt service.)
So your tax bill depends on what a city or county’s tax rate is and what your property is worth. This year, the value of almost every property in Palm Beach County went up, because home prices continue to recover from the real estate bust. So if a city or county keeps the tax rate the same, you probably will pay more. Even if the tax rate drops a tiny amount, you probably will pay more.
That’s why the state has something called the “rollback rate.” It’s the tax rate at which people would pay the same amount as the previous year. Even a rollback rate, of course, would not mean a real tax cut. It just would mean avoiding a tax increase.
When it comes to tax truth-telling, Boca Raton is more openly truthful than Delray Beach. In the memorandum for last week’s meeting, at which the Boca Raton City Council approved an unchanged operating tax rate and a slightly lower debt tax rate, City Manager Leif Ahnell noted that the combined rate is 4.7 percent higher than what the rollback rate would be. The fire assessment fee that began at $20 will remain at $85. I will talk more about “fees” as opposed to “taxes” in a later post.
On July 15, the Delray Beach City Commission set a maximum operating tax rate of 7.1661 and a maximum debt rate of 0.3028. Both are slightly lower than the rates for this year. The memo to the commission, however, did not include the rollback rate. I asked on Monday, and am waiting for a response.
Delray Beach Chief Financial Officer Jack Warner, however, did provide some interesting information in his budget memorandum. Notably, the current budget proposal represents a $3 million cut in operating expenses. That’s almost 3 percent less.
Delray’s budget picture might be even better if not for police and fire department expenses. Public safety costs are estimated to rise by roughly 17 percent, with $1.5 million of that going for higher pension contributions by the city. That is one more example of why cities must demand pension concessions from police and fire unions. Delray’s other problem is that even though property values have gone up the last four years, they remain roughly 17 percent below the peak in 2007.
Palm Beach County also will not really cut taxes. The proposed rate of 4.97 is lower by all of one cent from this year’s 4.98. Again, though, most homes increased much more than in value, so homeowners will pay more. The main reason, according to County Administrator Robert Weisman, is an increase for the sheriff’s office, whose costs make up more than 10 percent of the county budget. Weisman and Sheriff Rich Bradshaw famously don’t get along, which doesn’t help.
Though back-to-school sales will start soon, it’s still summer, and many residents are out of town. Boca Raton cuts back on council meetings. South Florida residents might think that little is going on. In fact, the most important work of local government is going on. The more truthful the product of that work, the better.
Outlook grim for 1,000 Friends of Florida
For those who care about quality of life in Palm Beach County—which ought to be everyone—the news about 1000 Friends of Florida is alarming.
The Palm Beach Post reported Monday that the non-profit growth-management group is in such bad financial shape that it has laid off the Palm Beach County representative, Joanne Davis. Former Director Charles Pattison is now a part-time consultant.
1000 Friends was formed after the Florida Legislature passed the Growth Management Act in 1985. The mission of 1000 Friends was to ensure that the state and local governments followed the law, which required all governments to have growth plans that focused on sensible development and environmental preservation.
In Palm Beach County, 1000 Friends’ most notable success was a legal challenge that blocked construction of Scripps Florida on Mecca Farms. In that effort, as in others, 1000 Friends dedicated itself to stopping the sprawl that eats up open space, drives up the cost of services and raises commute times. 1000 Friends also has been bipartisan and reasonable, intent not on stopping growth but controlling it.
The Florida Legislature, though, increasingly has become hostile to growth management. Under Gov. Rick Scott, the state has gradually abdicated its role, abolishing the Department of Community Affairs that could overrule bad local development and pushing key decisions back to cities and counties under the guise of “local control.” In fact, that often means control of a city commission or council by local developers who want to get around the comprehensive plan.
The cover story is that government needs to be more “business-friendly.” But politicians can’t brag that Floridians live in paradise if we keep paving it over. Not enough state and local politicians are the friends of Florida that 1000 Friends has been.
FAU needs to shop around
Last month I noted the troubles of soccer/marketing icon David Beckham finding a site in Miami for his proposed Major Soccer League franchise, and wondered if the university might want to offer its football stadium as a location.
The same FAU spokesman noted that the Palm Beach County Sports Commission has “reached out to David Beckham, and we support their efforts and welcome the opportunity to discuss the possibility of working with Mr. Beckham on bringing an MLS franchise Palm Beach County.”
FAU’s response is understandably restrained. Moving to Boca would not give Beckham the same level of international exposure, and would rule out the sort of waterfront location he has envisioned. A Boca-based women’s pro soccer team failed.
Still, FAU is right at least to be open. The stadium is a potential FAU asset for more than just football—especially until the football team wins more often. It’s a pretty, 30,000-seat arena that people soon will be able to reach via a new Interstate 95 interchange. If Major League Soccer doesn’t work out, FAU should keep looking. Even if soccer does work out, FAU should keep looking.
Last week, I referred to Dennis Crudele as Florida Atlantic University’s vice president for finance. An FAU spokesman says Crudele, who served as interim president after the departure of Mary Jane Saunders, actually has the title of Vice President for Institutional Initiatives and Major Projects. Crudele is FAU’s point person on the plan to create a university-centric district in the 20th Street area east of the Boca Raton campus.
You can email Randy Schultz at firstname.lastname@example.org
About the Author
Randy Schultz was born in Hartford, Conn., and graduated from the University of Tennessee in 1974. He has lived in South Florida since then, and in Boca Raton since 1985. Schultz spent nearly 40 years in daily journalism at the Miami Herald and Palm Beach Post, most recently as editorial page editor at the Post. His wife, Shelley, is director of The Learning Network at Pine Crest School. His son, an attorney, and daughter-in-law and three grandchildren also live in Boca Raton. His daughter is a veterinarian who lives in Baltimore.