Q&A of the Day – What Are South Florida’s Counties Doing w/Record Property Tax Revenue?
Each day I feature a listener question sent by one of these methods.
Email: brianmudd@iheartmedia.com
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Today’s Entry: Listen every morning heading to my office. Enjoy your perspective. My question is: What are the counties in Florida going to do with the windfall of property tax revenues they will be receiving with recent real estate purchases which had to have driven revenues higher?
Bottom Line: It’s a great question and one I’m more than happy to address for a couple of reasons. Awareness and advocacy. Governments across South Florida have historically been quick to cry poor during even the slightest of tougher economic times, often calling for votes on special tax assessments, while retaining and spending all of the revenue they receive during the boom times. This cycle persists largely due to a lack of awareness by voters which is why I make a point to discuss property tax assessments when they’re proposed annually – calling on homeowners to review their proposed property tax assessments so they can see what they’re paying and to whom. As I mentioned last year in discussing this issue:
What’s rising faster than inflation? South Florida’s property prices, which will lead to record high property taxes this fall. It shouldn’t come as any surprise to see double-digit increases in property assessed value in South Florida stemming from what happened last year, but for non-homesteaded property owners you’ll need to be ready for a double-digit increase in your property taxes this year. The average estimated property tax value increased – about 10% in Broward and nearly 14% in Palm Beach County. What this means for South Florida’s homeowners, you can expect paying 3% more if you’re homesteaded and if you’re not – meaning second homeowners and businesses owners can expect to pay 10% more come November – the highest allowable annual increase under state law. There are exceptions, but they are exceptions, only six of the 76 different taxing authorities in Palm Beach County saw increases below 10% - with none lower than 5%.
That’s what happened last year. Property tax assessments are based on what happened in the prior year and given how hot South Florida’s housing market remained for much of last year, we can probably expect more of the same this year. But as for what counties have done with the windfall record revenue in answer to your question... Counties are required to make budget information readily available for Floridians to see. Palm Beach County maintains an easy-to-use website to access budgets dating back to 2007. No worries, I’m not going to detail what’s happened since 2007. Instead, what I will do is illustrate the annual increase in spending by Palm Beach County over the past five years. It’s highly illustrative of the larger point.
Annual increase in spending by Palm Beach County on a percentage basis:
- Fiscal year 2019: 6.9%
- Fiscal year 2020: 8.3%
- Fiscal year 2021: 4.6%
- Fiscal year 2022: 10.4%
- Fiscal year 2023: 12%
That’s a five-year average annual spending increase of 8.4%. Have you averaged anywhere near an 8%+ annual raise over the past five years? The average resident of Palm Beach County certainly hasn’t. The fact of the matter is that the spending by Palm Beach County has risen at far greater than double the rate of incomes of its residents. And as you likely noticed it’s only exasperated with double-digit increases each of the past two years. The net effect of all the additional spending is that Palm Beach County is spending 40% more money today than they were spending just five years ago. That’s a huge percentage increase for a huge county which was already more populous than ten states. To put it in perspective, the median household income in Palm Beach County has risen from just over $65,000 in 2019 to an estimated $77,000 today. That’s an increase of 18.7%. That means that effectively the size of Palm Beach County’s government has increased at greater than double the rate of the average resident’s income. That’s outright abusive in my view. As for where the money is being spent...
Palm Beach County breaks expenditures out into various categories. Here’s a look at the top five...
- 23%: Public Safety
- 19%: Reserves
- 11%: Transportation
- 11%: Interfund Transfers
- 10% General Government
- 10% Physical Environment
It's interesting that reserves are seeing nearly a fifth of the overall funds and there’s a lot of room for interpretation generally. Without getting into the nitty gritty, which you can do if you’re inclined, it’s safe to say much of this is unjustified. This year’s budget year will be the first with Republican control of the county. This represents an opportunity to do things differently - prioritizing the interests of Palm Beach County residents, starting with lower property tax assessments, so it’s more affordable for a family to retain their home. It’s important that we mind this store with the country commission and advocate for this to happen.