By John Pacenti
Fearing businesses would leave Delray Beach over soaring costs, Mayor Tom Carney successfully spearheaded the move for a city tax cut at a meeting where department heads said such relief would necessitate significant reductions in services.
“The people who actually made Delray Beach, who gave it the buzz and did all the stuff that everybody wants to come to, well we’re crippling them,” Carney said.
Commissioners Juli Casale and Tom Markert joined Carney — all elected to the commission in March — in rolling back the preliminary tax rate July 25 to just a tad over $5.90 for each $1,000 of taxable value to support the city’s projected $187 million budget. The city also has a small second tax rate to pay off voted debt.
The $5.90 per $1,000 rate is the city’s “no new taxes” rolled-back rate that’s highlighted on tax notices that are sent out to property owners in August. Many cities lower their tax rates by a small amount from year to year to show their concern for taxpayers, even though they still rake in more tax revenue because property values have risen. That’s not what Delray Beach did.
“I’m freezing the taxes to at least what they were last year — that is the goal,” Carney said in a July 27 interview.
The only new property tax revenue for the city would be from new construction completed in 2023.
Both Carney and Markert said they campaigned on cutting taxes, while Casale at the meeting floated the idea of charging non-residents $35 to park at the beach to make up for lost revenue.
Commissioners Rob Long and Angela Burns voted against proposing the lower rate at the meeting — the commission’s third budget session in July.
Potential budget impact
In a dramatic show, Long asked Police Chief Russ Mager if under the rollback rate would he be able to have additional patrols, such as the one just added for the beach pavilion after June 21 gunfire there.
Carney and City Manager Terrence Moore tried to intercede, but Mager said, “If you cut my budget, it does not allow for me to do what I want to do, what’s necessary to keep the city safe at a level that we are expecting from our Police Department.”
Moore, at a budget workshop on July 16, said the rollback rate would result in a tax cut for residents.
A homesteaded property with a taxable value of $1 million last year would save about $278 in the property tax assessment tied to the city’s operating budget, bringing that portion of its tax bill to about $6,083.
Moore originally proposed a slight reduction in the city’s operating tax rate — set at $6.36 per $1,000 of taxable value last year — to roughly $6.26 per $1,000. The tentative rate the commission approved would eliminate almost $5 million in expected tax revenue, according to a city budget presentation.
Casale said her beach parking proposal for non-residents would generate $5.5 million — if all available parking spaces were taken by non-residents every single day of the year.
Moore had police, fire, parks and public works officials present proposed cuts that were politically painful at the commission’s July 25 meeting.
In addition to Mager’s presentation, Acting Fire Chief Kevin Green said he would decrease the number of men per truck for some shifts. And events — such as the Christmas Village — would need to be curtailed.
“Instead of cutting one big event that might get people upset, it’s just reducing all of the events a little bit, right across the board, to pull them all back a little bit, and we can save upwards of $175,000 by doing that,” said Parks Director Sam Mettot.
After the commission’s decision was made, Moore said he was determined to make Carney’s plan work without substantial cuts and proposed an Aug. 13 workshop.
Long fears services will have to be cut to balance the budget, which he said is not what residents want.
“The integrity of our events impacted, and our maintenance impacted, potentially, our tourism economy impacted, I’m going to guess they’d be willing to pay that extra eight or nine bucks a month,” he said.
Now is the time, mayor says
Carney defended his plan, saying the upcoming fiscal year may be the only opportunity for the city to give tax relief because the previous commission approved a new fire employee contract that will cost an additional $22 million next year.
“We’re taxing people to death,” Carney said. “It’s got to stop. This is not a sustainable way to continue by just keep raising taxes every year without going in with a very sharp pencil and seeing what we can cut.”
The approved tentative rate is all but set in stone. The commission, before formally adopting the budget in September, could raise the rate — but it would need to pay to have new tax notices mailed out to all city taxpayers and give them additional time to weigh in.
Property values are skyrocketing throughout South Florida, so keeping the tax rate unchanged isn’t enough to hold the line on taxes. Even making small cuts to the tax rate can still result in tax increases.
Delray Beach saw a nearly 10.9% increase in property value citywide in the past year. Homesteaded properties catch a break because Florida caps their assessed value increases at 3% a year.
Businesses, rental properties and second homes are on the hook for more, with their annual assessed value increases capped at 10%. Those costs are often passed on to the diner and the renter. “We are going to price them out of the market,” Carney said.
Resident Joy Howell said property owners are also getting hammered with increases in property insurance. “I had one property that went from $12,000 to $18,000 a year in insurance for this year. That’s outrageous,” she said.
Carney — who was previously mayor in 2013 — said services don’t have to be cut. He said the city has about 30 open positions that have been advertised for more than a year and are fully funded.
“That’s a million dollars a year,” Carney said. “They would have been cut in every other municipality.”
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