Economic Relief for Residents
Lowering the millage rate is a step toward offering much-needed economic relief to our residents at a time when the cost of living continues to rise. By easing the tax burden, we would join neighboring municipalities like Key Biscayne, Miami, West Miami and others, showing a regional commitment to support our communities.
Last year, on June 30, 2023, in a formal news release by the County, Miami-Dade County Property Appraiser, Pedro J. Garcia, urged local governments to cut property tax rates to compensate for a 3% increase in taxable values awaiting homeowners in their 2023 bills. He stated “this year’s unprecedented record growth of almost $48 billion of taxable value has provided our local taxing authorities with a windfall. However, I am concerned with the average homeowner and small businesses that may struggle with increased property taxes. The county and many cities saw significant growth; therefore, I am asking our local governments to consider a reduction in their tax rates.”
South Florida Municipalities' Considerations
Various municipalities in South Florida are considering lowering taxes due to the rise in inflation, cost of groceries, gas, skyrocketing insurance premiums and the overall cost of living. This regional trend underscores the feasibility and benefits of such measures, ensuring that Coral Gables remains competitive and supportive of its residents.
Thriving Business Environment
Coral Gables is home to a diverse array of restaurants and businesses all of which contribute to our tax base. Our Central Business District combined accounts for over 40% of our tax revenue. By lowering taxes, we can further stimulate economic growth, encouraging more businesses to set up shop and contribute to our vibrant local economy while continuing to maintain world-class services.
Increased Revenue and Fiscal Responsibility
Throughout the past decade, Coral Gables has benefited from a dramatic increase in revenue. Last year alone, our city collected an additional $23,858,959 of property tax revenue over the prior year. That’s a year-over-year increase of more than 400%. Furthermore, even with a 2% millage rate reduction, our city can expect to receive more than $7 million in additional property tax revenue. Therefore, there is no doubt that we can maintain our high-quality services and infrastructure. This economic good fortune presents us with a wonderful opportunity to give back to our residents by reducing their tax burden. Fiscal responsibility includes recognizing when to return surplus revenues to the community, fostering trust and goodwill among our citizens.
Community Benefits and Quality of Life
Lowering the millage rate can directly improve the quality of life for our residents, making homeownership and living in Coral Gables more affordable. This is particularly beneficial for our elderly residents on fixed incomes. For young families, this reduction could mean the difference between renting and owning their first home in our beautiful city.
Encouraging Long-Term Residency
By reducing property taxes, we can encourage long-term residency, promoting a stable and engaged community. Long-term residents are more likely to invest in and contribute to the local culture and economy.
Comparison with Neighboring Cities
Following the lead of cities like Key Biscayne, Miami, West Miami, South Miami and others which have successfully lowered their millage rates, Coral Gables can position itself as a leader in thoughtful and resident-focused fiscal policy. By doing so, we not only match but potentially exceed the standards set by neighboring cities, enhancing our competitiveness and appeal.
No Impact on Capital Budget/Operations
We can achieve this reduction without impacting our capital budget. By utilizing monies from other funding mechanisms, we ensure that essential infrastructure and capital projects remain fully funded. This strategic approach allows us to lower the millage rate responsibly, balancing fiscal prudence with the needs of our residents.
There are always alternatives to saving money. For example, I believe that we can evaluate staffing requirements, with the important exception of our police and fire staff. We can always trim some fat from line items that are not mission critical. For example, the City Manager seeks to increase the employee head count. I recommend that we limit new hires to the requested police, fire, and sensitive I.T. positions. This would allow us to move forward with 13 out of the 24 news hires that are included in this year’s prospective budget, while using the savings to provide tax relief.
According to the City of Coral Gables’ 2024-2025 Budget Estimate, operating revenues are estimated to be $265.7 million, a total increase of $14.3 million or 5.7% compared to last year’s operating revenues of $251.4 million. We should evaluate ways in which we can use this differential to benefit our taxpayers. Let’s keep in mind that for every additional employee we hire, the pension obligation increases. Therefore, hiring should be strictly on an as-needed basis.
Property values in Coral Gables have seen substantial growth over the past three years, outpacing many neighboring municipalities. As of June 1st, 2024, the Estimated Property Taxable Values for the city stand at $24.5 billion, marking an impressive 8.2% increase from the previous year's $22.6 billion. This total is comprised of $22.254 billion from existing properties and $246 million from new construction.
Contrary to claims that our population is increasing, our latest census data has revealed that the City has experience a drop in population, for this reason, we are no longer members of the Transportation Planning Organization (TPO) which requires a minimum of 50,000 residents to receive representation. This leads one to ask, why is our budget increasing so dramatically if our population is not?
Setting the Record Straight
It is unfortunate that some continue to resort to disingenuous scare tactics; misleading residents by falsely claiming that city services are at stake and that the services we provide will suffer. Let me be clear, this is patently false. The goal of lowering the millage rate is to provide relief to all residents, and we are committed to maintaining our world-class services without compromise. If a municipal government with a quarter-billion-dollar budget cannot implement a modest $2.6 million reduction without compromising essential services, it raises serious questions about its fiscal management and structural stability. I for one do not believe we are structurally unstable; I believe we simply lack the will to make difficult choices. I also believe we can do better.
It's important to note that Florida law mandates that tax reductions be applied uniformly across all property types. Claims suggesting that this tax cut is designed to favor a select group are inaccurate and misleading. State law makes it impossible to tailor tax cuts to benefit any particular segment of property owners. Every property owner in Coral Gables, from small homeowners to large businesses, will see the same percentage reduction in their property tax rate.
I encourage all residents to familiarize themselves with these facts. Our goal is to foster an informed dialogue about this proposal, based on accurate information and a clear understanding of how property tax reductions work under Florida law.
Lowering the millage rate is a strategic and compassionate move that reflects our city’s commitment to the financial well-being of our residents, our responsibility to use increased revenues wisely, and our desire to continue fostering a thriving, dynamic community. By leveraging alternative funding mechanisms, we can achieve this goal without compromising our capital projects or the quality of services provided to our residents.
Compromise
In the spirit of collaboration and responsive governance, I've carefully considered the concerns raised by my colleagues on the Commission. Last year, I proposed a 5% reduction of the millage rate. This year, after thorough analysis and in recognition of the need for a balanced approach, I initially suggested a 2% reduction.
However, I understand that governance is about finding common ground and moving forward together. With this in mind, I would like to propose a compromise: a 1% reduction in the millage rate. While this reduction is far more modest that what I would prefer, it nonetheless represents a middle path that acknowledges both the need for fiscal prudence and tax relief for the residents. Half a loaf is better than no bread, after all.
What’s more, it would reflect our shared commitment to the well-being of Coral Gables and its citizens. While it may not be what I think is needed, it would be an important step in the right direction. It would demonstrate our ability as a Commission to work together to find constructive solutions.
This compromise proposal balances our residents' desire for tax relief with our fiscal responsibilities. By adopting this measured approach, we demonstrate our unity and commitment to serving all Coral Gables citizens. I urge my fellow Commissioners to join me in supporting this initiative. Together, we can implement a policy that provides meaningful relief, serves our city's best interests, and demonstrates our ability to govern collaboratively and responsively.
