Key Biscayne’s tax base surged 9.7% to just under $10 billion this past year, significantly topping an earlier estimate from the Miami-Dade Property Appraiser. The property value increase will bring in more cash — and open the door to an expanded list of Village projects for the 2024 budget.
Among the new items the Council asked to have added are placing artificial turf on the leased St. Agnes playing field, repairs to traffic circles, and professionally-contracted management of the Village’s athletic programs. This wish list — sort of like looking at all the factory options on a car — would add about $4.9 million to what Manager Steve Williamson had proposed as his “core” budget.
Will the increased revenue mean more items will stay on the wish list?
Mayor Joe Rasco said he’s doubtful.
The increased tax base “does give us a little bit of a cushion to play around with the numbers,” Rasco said. But, he said Saturday the Council would probably be reluctant to go ahead with all of the funding additions if it means raising the local millage, or tax rate, too much.
“I think it was very clear that the majority of us aren’t interested in going whole hog,” Rasco said.
If all the items were added, the budget would check in at $42.8 million with an average tax increase of 14.6%, which would still be the lowest rate in Miami-Dade County, officials said.
But average tax rates don’t tell the full story, because taxation is not uniform.
Importantly, residents with homesteaded properties would only see a 7.9% increase under the draft budget because of the Florida Constitution “Save Our Homes” provision that limits tax increases when real estate markets rise more than 3%.
About a third of the island’s tax base gets the benefit of that 3% cap, officials said. So, the bulk of any property tax increase is shouldered by the island’s commercial property owners and people who rent out their homes. Landlords, of course, often pass the higher taxes to tenants.
A tentative tax rate will be set July 18, but that number serves only as a cap, because the Council and administration typically make substantial reductions before budget hearings in September.
The fact that soaring Miami property values might lead to bigger municipal budgets isn’t being cheered everywhere. Pedro Garcia, the County property appraiser, called it a “windfall” for local taxing authorities and asked that localities consider a reduction in tax rates, known as “millage.”
In Key Biscayne, the budget was a featured topic of discussion at the first meeting of a new advocacy group, the Key Biscayne Neighbors Association.
Former Council Member Ignacio Segurola, who often voted against budgets while in office, led a presentation in which he said Williamson’s budget was full of what he said was “fat and bloat.”
“We are getting taxed for money we are not spending,” Segurola said at the meeting, repeating a frequent criticism that too much is being kept in reserves.
But Williamson, seeking to counter that criticism, put more detail on the Village’s reserve strategy at Wednesday’s workshop, which he said based on storm preparedness.
He described a meeting with Sanibel Island Mayor Dana Souza, whose Gulf Coast community was devastated by Hurricane Ian last year.
The goal, Williamson said, is to have six months of operating funds on hand in case a monster storm like Ian were to hit Key Biscayne.
“From a physical perspective, it was horrendous, right?” Williamson said as he related his conversation with Souza. “Probably the second thing he mentioned to us as the most important thing we need to do was a revenue replacement plan. Because when he entered into the post-hurricane, and began to do his operations, he had no money. He actually had to let people go.”
Council Member Ed London said the Village should think about having a letter of credit to borrow money to reduce the size of a reserve, and officials said they’d study it. But they also noted that borrowing money has its own set of problems.
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Tony Winton is the editor-in-chief of the Key Biscayne Independent and president of Miami Fourth Estate, Inc. He worked previously at The Associated Press for three decades winning multiple Edward R. Murrow awards. He was president of the News Media Guild, a journalism union, for 10 years. Born in Chicago, he is a graduate of Columbia University. His interests are photography and technology, sailing, cooking, and science fiction.