News

By Dan Moffett

    During a contentious three-hour budget meeting, South Palm Beach council members decided to give residents a small dose of tax relief — roughly $40 per homeowner next year.
    But the decision comes with consequences. The town runs the risk of having to dip into its reserves to avoid going into the red in 2017, and the dispute over taxes has strained relations among council members.
    A heated debate erupted between Councilwoman Stella Gaddy Jordan and Vice Mayor Joseph Flagello during a Sept. 8 hearing that was scheduled to be a formality during which the council would rubber-stamp budget numbers already debated.
    Late in the night, Jordan proposed cutting the tentatively approved tax rate for 2017 from $4.3174 — the rate the town has had for the last half-dozen years — to a figure halfway to the rollback rate of $3.938 that would hold tax revenues flat. Jordan’s idea was to allow an increase in homeowners’ net taxes but only half as much an increase as the council had previously agreed on.
    “It’s not that sufficient of an amount that it will make a big deal,” Jordan said, pointing to the loss of about $54,000 in tax revenues the town would incur.
    Flagello vehemently disagreed. He said it was reckless for the council to deviate from the steady fiscal approach that had gotten the town through some hard economic times. Flagello said it was premature to count on revenues that might come from a proposed 1-cent county sales tax on the November ballot, or from the development of the old Palm Beach Oceanfront Inn site.
    “I think there’s a 70 percent chance that the sales tax is not going to pass,” Flagello said. “We’re always talking about how we’re being fiscally conservative. Now at this moment we’ve decided to move away from that policy. Doing a rollback rate in the future is something I totally agree with, but we’re deciding to go away from our fiscally conservative ways for about $40 a person.”
    Flagello said it was too early to dip into the tax windfall that could come from the Oceanfront Inn project: “We should pick the fruit when it’s ripe. It’s not ripe yet.”
    Jordan argued that the town’s budget and the economy were healthy enough to finish in the black: “I’m confident next year we’ll have an overage in revenue. I’m sure of it.”
    Jordan said she believed the reduction wouldn’t have a significant impact on capital projects, including plans for improvements to the Town Hall and pedestrian lighting.
    The council agreed with Jordan, voting 4-1 against Flagello to approve a lower rate of $4.13 per $1,000 of taxable property value, halfway between the rollback rate of $3.94 and the current $4.32.