By Rich Pollack

While some communities are facing financial shortfalls and need to increase revenue for the coming budget year, Highland Beach will hold the line on its tax rate while anticipating only a small tap into reserve funds.
Faced with a budget expected to top $12 million in fiscal 2021, town commissioners tentatively agreed to keep the operating tax rate at $3.229 per $1,000 of taxable value, up 1.66% over the rollback rate. Meanwhile the debt service tax rate will be $0.5584 per $1,000 of value, a slight decrease from this year.
The overall tax rate, as a result, has tentatively decreased from $3.799 to $3.788. That means that the owner of a home with a taxable value of $300,000 would pay about $1,135 in municipal taxes.
Town officials still can lower the operating tax rate in coming weeks but cannot raise it.
“We’ve held in place,” said Town Manager Marshall Labadie. “We haven’t had to have an increase in our tax rate.”
Because values on many properties in town have increased, some homeowners may see an increase in municipal taxes. Overall, property values in the town rose by about 2.5% to about $2.6 billion, generating about $9.6 million in tax revenue.
To help eliminate a slight shortfall, the town will pledge about $208,000 from unassigned reserves for the coming budget year.
The reserves, however, grew by about $550,000 at the end of the 2018-2019 budget year, the result of funds that were budgeted but not used. An additional $300,000 is estimated to be added to reserves after Sept. 30, the end of the current budget year.
With the additional money, the town’s unassigned reserves will top about $6 million, or about 52% of the overall general budget.
At least one commission member believes that is more than necessary.
“That surplus was created through taxes that were collected from residents and not spent by the town,” said Vice Mayor Greg Babij. “While a municipality should have a surplus to tap in during times of crisis, it shouldn’t be excessive.”
Babij said that Highland Beach’s reserves are significantly higher, percentage wise, than those of other towns and believes that the town should consider using reserves for one-time costs and to avoid having to raise taxes.
Town officials say the saved money could be needed during the coming year as the town explores the condition of its aging sewer lines and deals with unexpected costs from COVID-19.
“There are still uncertainties with the pandemic,” Labadie said.
For now, Babij said, Highland Beach may be in a better position than other municipalities when it comes to facing impacts from the coronavirus.
The town derives only small amounts of revenue from sales tax and has virtually no commercial properties other than the Delray Sands Resort.
Still, with an eye to the future and the possibility of the virus affecting property values, Highland Beach has instituted a hiring freeze, limiting hiring to positions deemed essential.
Babij says Highland Beach could be fortunate and not feel any impacts on property values from the pandemic.
“We are a small seaside town, and due to the surge of exits from northern cities/states into southeastern towns such as ours, we may not actually experience a drop in property prices,” he said. “We might even see a small increase as demand may be greater than supply.”

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