South County homes and businesses are still leaking taxable value, but this year it’s closer to a dribble than a dam break.
While eight of nine coastal towns lost more than 5 percent of their taxable real estate value in 2009, only Manalapan declined more than that last year, according to preliminary figures released May 26 by the Palm Beach County Property Appraiser.
In fact, Briny Breezes was one of two Palm Beach County towns — Jupiter Inlet Colony was the other — to gain value. The taxable property in the coastal mobile home town is up 2.37 percent.
Ocean Ridge, South Palm Beach and Boca Raton suffered less than a 2 percent fall.
Or, as South Palm Beach Town Manager Rex Taylor put it: “The increase in the decline is lessening.”
Still, the slight decline means town officials must find bits of bare-bones budget carcass to scrape away again this budget season. Most of the nasty work has been done in the last three years of free-falling tax values — laying off workers, cutting services and dipping into reserves.
“We’ve weathered that storm,” said Boca Raton Budget Director Sharon McGuire, whose City Council kept the tax rate the same by using $2 million in reserves to keep the budget balanced last year and in 2009. “But that can’t be an ongoing plan.
“Hopefully, the values are flattening now, but unfortunately, expenses don’t remain at the same level,” McGuire said.
South Palm Beach, which suffered the most dramatic South County decline in 2009 at 14.06 percent, improved the most to a 1.48 percent slide.
“Hopefully, the effect we’re seeing is the bottom of the trough, but no one knows how long we’ll be in that trough,” Town Manager Taylor said.
The Property Appraiser’s Office believes property values may be bottoming out as well, but Property Appraiser Gary Nikolits thinks it may be two or three more years before the market begins to rebound.
“We have a feeling thing are stabilizing a bit,” said John Thomas, residential appraisals director for Nikolits’ office. “We’re not really good at predictions, but we’re hopeful. Throw the chicken bones out, spin the wheel, go see Madame Rosa and gaze into her crystal ball and we’ll come up with our best guess,” Thomas joked.
Hard numbers may be more helpful. Countywide, values dropped 10 percent in 2009, but 2.77 percent last year. Two years ago, every Palm Beach County municipality lost more than 5 percent of its taxable value and almost half fell by 10 percent or more.
In 2010, things improved. Twenty-one of the county’s 38 municipalities lost less than 5 percent in value and only 7 dropped more than 5 percent.
Still, the total taxable value across the county is $123.7 billion, compared with $169.4 billion in 2007, before the real estate bubble exploded.
Briny Breezes’ uptick in value is due to the property appraiser having a better handle on land values, since few sales occurred in the aftermath of possible sale of the entire town to a developer three years ago.
“I knew that revenues would be up but I didn’t know they’d be up that much,” said a jubilant Briny Breezes Mayor Roger Bennett. “It means several thousand more dollars for us.”
Ocean Ridge lost less than one percent in value, compared with more than nine percent in 2009. “It would be nice if we got some of it back, but at least we didn’t go down much,” said Town Manager Ken Schenck.
He suspects an uptick in challenges to individual assessments by homeowners in town may have helped soften falling values. “I’d like to think this is the end of it, but I don’t know,” Schenck said.
Gulf Stream lost barely two percent in taxable property in 2010, less than half of the 2009 amount of 5.4 percent. Mayor William F. Koch said it will make planning for next year’s budget easier.
“We’re not bleeding as bad as some other communities,” he said. “Hopefully, next year they’ll all be up.”
Highland Beach, which had a slight decrease in falling values — from 6.08 percent to 4.9 percent — based its budget projections on a similar reduction this year. “So this is a little less and that’s good,” said Town Manager Kathleen Weiser, who said it won’t change the town’s approach to budgeting. “We’re in the early stages, but we’ve given the department heads marching orders to keep expenses the same or less.”
Although Lantana lost more than 4 percent in taxable value, that is much improved from the 17.30 percent decline the year before.
“It’s obviously not as bad a number. It’s a lot better than 10 percent,” which Town Manager Michael Bornstein feared. He estimated the tax revenue loss of slightly less than $111,000. “Our previous years were double digits.”
Commercial property hit
Lantana, unlike many coastal towns, has a significant inventory of business properties, which are beginning only now to see a decline in value across the county. “I’m worried about our commercial property taking a hit,” Bornstein said.
Manalapan’s taxable value declined even more than in 2009, the only South County town whose fall increased — from 4.03 percent to 7.22 percent. Thomas, of the appraiser’s office, said more recent sales gave his office a better look at the seaside town’s property values.
Despite the falling revenues, Mayor Basil Diamond doesn’t think the Town Commission will resort to a tax rate increase, a tactic the commission has avoided in recent years. Last year, the town manager and finance director’s positions were combined and other part-time posts joined.
Diamond said the taxable value doesn’t reflect home construction and permitting under way now. “It won’t help us this year, but it will be good for us next year,” he said.
Recently, mayors of coastal towns met to discuss streamlining operations. “Maybe we can coordinate things better. Maybe we can share positions,” Diamond said.
He is hopeful town boards will agree to finance a study to see how they can coordinate services. “Everyone likes what they have, but there may be some areas we can consolidate,” he said.
Taxable property values will not be final until July 1 and are typically slightly less onerous than this month’s preliminary numbers. Taxable value is not the same as market value and does not include exemptions for homestead and other breaks.
This year the military serving abroad will get an additional homestead exemption for every day they are out of the country.