Taxable property values in Key Biscayne rose 8.8% last year, a number that could set the stage for higher taxes as municipalities –including Key Biscayne — start debating their upcoming 2023 budgets.
If tax rates remain unchanged, that would mean property taxes would also increase an average of about 8.8% next year.
Pedro Garcia, the Miami-Dade property appraiser, urged municipalities to consider reducing property tax rates, known as “millage” to offset increases driven by the strong real estate market.
But that could be a tall order for local governments.
At a recent council meeting, Village Chief Financial Officer Benjamin Nussbaum outlined problems inflation is already causing and said calls for reducing millage are “premature.”
While wage increases in village labor contracts are capped at 4%, he said capital project contractors are asking for much more — as much as 20 to 30% in some cases. And when it comes to hiring new employees, he said the labor market is not conducive to savings.
“We have to stay competitive to attract talent,” he told council members. “It’s been a challenging time to work with these contracts with these increasing prices.” Consumer prices in the Miami area are up about 9.6% from a year ago, according to the U.S. Bureau of Labor Statistics.
The property appraiser’s June 1 preliminary taxable value for the island was $9.0 billion, up from $8.2 billion the year before. The Village benefited from about $23 million in new construction. Key Biscayne’s increase was behind the rest of Miami-Dade County, which increased 10.2%.
Mayor Mike Davey said he’s glad that Village property values have increased, but said the budget process should be about funding needs.
The first budget workshop is June 28.
“We are going to be responsible with folks’ money,” he said. “I’m not going to make predictions.”