Tax cut effect muted; savings slight
As early property tax notices start hitting mailboxes across South Florida this week, most taxpayers are due a slight drop in their bills.
Even so, more than half the cities in Miami-Dade, and a third in Broward, are set to avoid the most severe effects of the state-mandated tax cuts.
In Cutler Bay and Miami Gardens, two communities that are exempt from the cuts because they are relatively new, revenues could climb as much as 24 percent, based on a Miami Herald review of preliminary tax rolls.
That exemption, and several others, mean that the tax cuts mandated this year by the legislature will be muted across much of South Florida -- if the initial tax rates proposed by communities stay where they are. Local governments can reduce the rates that they have announced, but they cannot increase them.
Citing the windfall spurred by soaring property values over the past decade, state legislators voted last spring to cut property taxes significantly. The bold strokes of the plan grabbed headlines: For next year's local budgets, communities could raise only as much revenue from existing property as they did this year.
Many cities that had grown particularly wealthy were required to make extra cuts up to 9 percent.
But in coming weeks, as taxpayers tear open initial tax notices showing county, school and city taxes, many will come face to face with the results of the fine print.
The cities of Miami and Opa-locka, for example, must roll back to 2006 revenue but don't have to take additional cuts because they have recently been in financial crisis.
Officials in 13 other communities, including Coral Gables and Hialeah, have set initial rates that would roll back revenue but would also take advantage of a provision in the Tallahassee mandate allowing them to reject the additional tax cut.
In Broward, tax rates in six communities would buck the additional cuts; five other cities are exempt because they are new.
Pembroke Pines Commissioner Angelo Castillo said residents want tax relief, but not at the cost of reducing swimming pool hours, closing City Hall one day a week and charging $1 for the senior community bus.
Those were the options presented to commissioners at last week's budget workshop.
Instead, the West Broward city will reduce taxes slightly, so that the owner of a $250,000 home taking the standard $25,000 homestead exemption would pay $1,110 in city taxes, down about $46 from last year.
Under the state-mandated cuts, that homeowner would have saved $150 in city taxes.
''We're doing that because that's a healthy tax savings for our residents that doesn't force us to become a city that offers less services than our residents want,'' Castillo said.
The city of Miami Gardens, which is exempt from the rollback because it is less than 5 years old, will collect about $5 million more than it did last year.
Most of that will go to hire new police officers, said City Manager Danny Crew.
The city will see a 41 percent increase in taxes from nonhomesteaded houses and commercial properties. A big chunk of that will come from two new Wal-Marts, Crew said.
Cutler Bay, Palmetto Bay and Doral are also exempt because they are new.
Doral Mayor Juan Carlos Bermudez complained that all of the $3 million in additional cash the city expects to raise this year will go toward an almost $9 million ''mitigation'' payment, which the county required from wealthier communities as a condition of incorporation.
Bermudez has been fighting to eliminate the fee.
''I`ve made the commitment that the day we get rid of mitigation, we'll be the lowest taxed municipality in the county,'' Bermudez said.
Another way for communities to avoid budget cuts is to keep building, because new construction is not subject to the rollback provisions. That means the city of Miami, which is experiencing a building boom, will actually raise $5 million more than it did last year, said Chief Financial Officer Larry Spring.