Most Palm Beach County cities will raise their tax rates for next year
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By Andy Reid
South Florida Sun-Sentinel
August 17, 2009
Falling property values mean less revenue for city coffers; higher rates means fewer service cuts, officials say
Even with their residents suffering through job loss and plummeting home values, most local communities are following Palm Beach County's lead and proposing to boost property-tax rates.
Twenty-four of Palm Beach County's 38 municipalities tentatively endorsed property-tax rate increases for the coming year. This comes as the county considers raising tax rates as much as 15 percent.
Delray Beach and Boynton Beach are among the cities proposing increases in their operating tax rates to compensate for a drop in property-tax revenues due to the struggling economy.
Boca Raton is among the nine Palm Beach County cities proposing to keep the same tax rate.
Local elected officials next month vote on the tax rates, which still could be lowered.
Critics say local governments need to cut deeper to avoid adding to the expenses of struggling homeowners. Hal Valeche has led an anti-tax-increase campaign that swamped county commissioners' with e-mailed objections.
"I don't see any reason to defer . . . serious cutting," said Valeche, a former Palm Beach Gardens city councilman. "I would prefer to see money in taxpayers' pockets to help the economy."
Local government officials counter that they are making deep cuts, but still need to increase tax rates to help pay for valued community services. Avoiding a bump in tax rates means potentially putting deeper cuts to the Sheriff's Office, parks programs, library hours and bus service on the budget chopping block.
"We have less resources," County Commission Chairman Jeff Koons said. "That isn't what people want to hear, but that is what we face."
The county's proposed 15 percent tax-rate increase would push the rate from about $3.78 per $1,000 of taxable value to $4.34.
For a home valued about $230,000 and eligible for a $50,000 homestead exemption, that would equate to about $800 in county property taxes next year. That's $100 more than this year, not including taxes for cities, schools and other government agencies. The taxes levied by the County Commission equate to about 25 percent of the typical property tax bill.
An increase in tax rates does not necessarily translate to bigger tax bills. Individual property values, when a home was purchased and whether owners qualify for homestead exemptions factor into whether a bill ultimately goes up or down. County officials have estimated that as many as half of property owners would see no increase in the tax bills.
Delray Beach is considering everything from higher fees to digging into reserves to avoid raising the tax rate of $6.39 per $1,000 of assessed value.
The City Commission in July set a tentative tax rate of $7.38, but it has a series of workshops scheduled to discuss cuts and recommendations from the city's Budget Task Force to cover what could be a $10.4 million hole in the budget if officials vote against an increase.
City Manager David Harden compiled a list of potential cuts that included laying off 39 full-time employees and eliminating the police dog unit.
Commissioner Fred Fetzer said the city should consider tapping into its $18 million in reserves, set aside for emergencies.
"This is an emergency," Fetzer said.
Boynton Beach budget planners were under orders to avoid layoffs. The city's proposed spending plan calls for leaving vacant positions unfilled and holding off on some construction projects, but would still boost tax rates from about $6.45 per $1,000 of taxable value to $7.30.
In contrast, Boca Raton's operating tax rate will remain unchanged for the upcoming fiscal year, which begins in October. City Council members in recent months have made clear they don't want to raise taxes but prefer closing a $3 million to $4 million budget shortfall in other ways.
The operating tax rate, if approved in late September, would remain $3.02 per $1,000 of taxable value.
Mayor Susan Whelchel has lauded the city for its low tax rate and for bucking the trend of raising taxes.
"In an environment such as this, it's just the wrong message," Whelchel said of raising property taxes. "Everything we should be doing now would be to show our citizens that we understand what type of issues they're having to deal with."