By Anne Geggis
Increases in the value of residents’ homes should not mean paying more to run city government, Mayor Tom Carney said, asking for a budget proposal that won’t require residents to write bigger tax checks than they did last year.
Delray Beach’s tax rate has been dropping for 10 consecutive years, but the amount the city is spending has been on a steady upward trend.
As a result, property owners have been paying more taxes every year as the value of their homes increases. In that vein, Carney challenged city staff to end that trend and come back with a budget with a tax rate that raises no more money than last year on existing property owners. In that scenario, the city would get additional taxes only from new construction.
“I really think we need to be talking about actually saving the taxpayers money by ensuring they are not going to pay any more taxes this year than they did last year,” Carney said.
City Manager Terrence Moore did not make a specific recommendation at the June 11 budget workshop, but he had charts that showed various scenarios.
At current estimates, adhering to Carney’s request would drop the current operating tax rate from $6.36 per $1,000 of taxable value to $5.65 per $1,000. That would mean Delray Beach’s property tax revenues would drop by 11% to $97.98 million, compared with what it would collect if the city kept the current rate. And the amount of revenue that the city takes in would be about $23 million less than it plans to spend.
One of Moore’s charts showed how the general fund expenditures have risen from $117 million in 2017 to $188 million in 2024 — a 60% increase.
Delray has been able to pay for it with a lower tax rate because taxable property values are increasing even faster. But for the next year, the climb in taxable real estate values appears to be cooling: After growing 13.4% in 2023 and 15.2% the year before, the city’s property values this year are up a smaller 10.9%, according to property appraiser figures.
Moore said he thought that staff could find $8 million in savings strategies in departmental budgets and take $6.8 million from the fund balance, which is currently at a level greater than the target the city set.
Moore, however, noted that some $7.4 million in projected increases are beyond the city’s control: general liability insurance, increases in staff salaries and wages, pension costs and garage rental rates for city vehicles.
The mayor was unmoved from his budget goal, however.
“I cannot tell you how I think that we have the room to do it,” Carney said. “And I didn’t say it was going to be easy, but I just think the taxpayers deserve to not just pay more taxes because their property values went up.”
Specific details are scheduled to be presented at the July 9 commission meeting.
Right now, the city has a fund balance that is $8.5 million more than the target it set, which calls for the city to have $40.2 million, or 25%, of the general fund budget saved.
Moore highlighted how Delray Beach’s creditworthiness has been upgraded by one of the biggest credit agencies. Moody’s upgraded Delray’s credit from its third-highest rating to its second-highest, he said.
“Delray Beach has done an excellent job in keeping alignment,” Moore said.
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