The Coastal Star

Delray Beach: Commission agrees to lower tax rate slightly

By Jane Smith

Delray Beach commissioners agreed to lower the tax rate slightly, keeping a promise to their residents to reduce the tax rate each year for 10 years.
The commission action July 10 capped the total tax rate at $6.97 per $1,000 of property value for the next financial year, which starts Oct. 1. It would be the sixth consecutive year that Delray Beach is lowering its tax rate.
“I want to keep the promise to our taxpayers,” said Mayor Shelly Petrolia. “I am challenging the city manager to find flexibility in the low-hanging fruit of outstanding parking tickets and from our reserves.”
Delray Beach has a lush reserve account of more than $34 million as of June. That amount represents about 28.9 percent of this year’s operating budget. The commission wants to set aside 25 percent, or $29.6 million, for hurricane-related expenses and other emergencies.
Florida does not have a law requiring municipalities to set aside a certain percentage for reserves, said Kurt Wenner, research vice president at Florida TaxWatch. “Most local governments have their own internal policies on reserves,” he said. Florida TaxWatch is a nonprofit organization that researches and analyzes state and local government taxation issues.
Nearby Boynton Beach has a lower reserve goal of 10 percent set aside for emergencies, according to information presented in mid-July at its budget workshop. Boca Raton also has a 10 percent goal. When the current financial year started, Boca Raton had about 34 percent of its operating budget, or $53 million, in reserves.
In Delray Beach, City Manager Mark Lauzier said the lower rate would not allow the city to continue to increase the size of its public safety staff, which was reduced during the Recession. Another five police officers and eight fire-rescue employees are needed, he said.
Deputy Vice Mayor Shirley Johnson was the lone no vote on the reduced tax rate. She wants to see more police on the streets.
Lauzier also said the city’s rollback rate is $6.55 per $1,000 property value. The rollback rate is the rate that would generate the same tax revenue as the prior year with allowances for new construction.
Even though the tax rate will be slightly lower, city property owners will pay about 3.2 percent more in property taxes.
In addition, Lauzier talked about the looming budget amendment, where voters statewide will be asked in November whether they want another $25,000 reduction on top of their homestead exemption of $25,000 in property value.
If that passes, the city’s property tax collection would be reduced by $1.3 million, he said.
Lauzier gave each commissioner a thick budget book to read before the Aug. 14 meeting when they will hear presentations by departments.
He also planned to hold three budget town halls in August for residents. The dates and places were: Veterans Park on Aug. 2, Delray Beach Municipal Golf Course on Aug. 6 and Pompey Park Community Center on Aug. 8, all at 6 p.m.
The city’s proposed tax rate has two components. The operating tax rate is $6.76 per $1,000 value and the debt service rate is 21 cents per $1,000 value. The total tax rate for the current year is $7.09 per $1,000 value with an operating rate of $6.86 per $1,000 value and debt service rate of 23 cents per $1,000 value.
Lauzier had wanted to keep the next budget year’s operating tax rate the same as this year’s.
The tax rates had to be set by the end of July in order for the county property appraiser to mail notices in mid-August to every property owner. The notices cover assessed values and proposed tax rates.
The rates can be lowered but not raised during the city’s budget hearings in September.

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