The preliminary property value assessments are in and, while Miami Beach property values increased 3.4%, it isn’t enough to maintain current service levels in next year’s budget.
In a Letter to Commission, City Manager Jimmy Morales, wrote the certified property assessment values will be available from the Miami-Dade County Property Appraiser on July 1, but “Typically, the difference between the preliminary and certified values is minor.”
As we reported last week, Miami Beach CFO John Woodruff told Commissioners at their annual budget retreat property values would need to increase 7% in order to maintain current service levels in 2019.
With a 3.4% increase, the City will realize $5.8m more in tax revenue, but that still leaves a $5.4m deficit. Morales wrote, “The newly developed Program Budget will be used to help identify potential reductions in service levels to balance the FY 2019 budget.
Finance and Citywide Projects Committee Chair, Commissioner Ricky Arriola reacted to the numbers: "People need to realize that our City's budget is based on two things – revenues and expenses – just like any other budget. Our revenues depend on two primary components, property taxes (which is calculated on assessed property values) and resort taxes (what residents and tourists spend on hotels and food/beverage purchases).
"About 59% of our expenses are for our Police and Fire Department. These expenses are pretty much fixed as a result of our union contract negotiations. The rest of the budget goes to other essential city administrative services – sanitation, public works, parks, code enforcement, etc.
"Resort taxes are very volatile. We compete with thousands of cities around the world for tourist money and things like Zika, hurricanes or even a damage to our brand can affect tourist visits.
"As for property taxes, we are stuck with the fact that under Florida Constitution, the most a homesteaded property can increase is 3% a year. So when a slow down in real estate occurs (as we are currently seeing) and homes are not being sold and reassessed at higher property values, our property tax revenues may only grow in the neighborhood of 3%. In fact, we have been alerted that this year, our taxable assessed property values only went up 3.4%!
"So, with the prevailing attitude against new development, our City faces a future of slow revenue growth and therefore painful future cuts in services. It's been fashionable to run for elected office on a platform of 'no new development' but I don't think people understand that that will mean fewer police officers, a smaller fire department, decreased city services and fewer interesting projects to live in, shop at or to dine."The Finance and Citywide Projects Committee meets Friday at 9 am to further discuss the upcoming budget.