Tax Season: There Is A Misconception That We Can Simply Cut Costs

By Hallandale Beach Mayor, Joy Cooper

September 8, 2022

It's September and counties, school boards, special taxing districts and cities are formally adopting our budgets. Over July, property tax statements all went out. In Hallandale Beach we did increase our tax rate which was to maintain our level of services and in some cases increase them. In addition to the tax rate increase many residents saw a huge jump in their taxable values due to the current housing market and the taxing structure here in Florida.

Our property tax system in Florida is different compared other states. Typically, there is flat tax assessed on the value of a property. In Florida, years ago, the State Legislators passed what is called, "Save Our Homes."

In the seventies there was what one would call a land rush. Many developers flocked to the Sunshine State and began building. Many condominiums were built. Since there is not very much land between the seagrass and sawgrass, property prices rose. Many year-round residents and seniors were being taxed out of their homes. The Save Our Homes Law was passed so that no matter what the tax rate was set at, homesteaded properties would not have to pay over a 3% increase in tax annually.

Obviously, the seniors and families that lived here were relieved. The biggest problem with the law was the actual cost to live in our cities, towns, villages and counties that were paid for by the non homesteaded and commercial properties equating to higher taxes. Over the years, this imbalance has been exacerbated by additional exemptions. With $50,000, plus another $25,000, plus the $75,000 in taxable value, some properties in Hallandale Beach were paying no taxes. A good example of these properties are on Layne Boulevard. 20 years ago, many of these units were valued at $50,000.

Florida has now seen another land rush since COVID-19. Property values have increased almost 40% across the board. As part of Save Our Homes, owners receive a statement that breaks down market value, taxable value and SOH Values. The tax statement is called Truth In Millage. It also shows the increase in value of what the tax rate is, to generate the same exact revenue as last year, called the roll back rate. What it does not show is the fact that governments, just like other businesses still have costs that are not fixed. In other words, it does not account for the cost of living nor for the inflation. It also creates the misconception that like other businesses, we can simply cut costs.

I would like to share this concept. I may produce a line of products. Items P E and F which all cost money to produce but P does not generate revenues. As a company, if I decide to cut P, lay off the workers and streamline manufacturing. Now what if items P, E and F were city services: Police, EMS and Fire. We just cannot stop providing these life sustaining services. Over the past three years, former commissioners and Mayors did just that and cut the services. Our Police Department was down 20 positions. We now only have 5 vacancies. So, do we cut the police? Not on my watch!

Cities do not have the luxury to simply not provide services. We can look at ways to streamline operations, but this too comes often with a price tag of reduced level of services or worse having hidden costs. Here are two good examples of why moving away from the best tested practices, does not always work.

Over the past 4 to five years there were hiring freezes and layoffs. One Department that truly was gutted was our Building Department. Cities must enforce building codes and are required to provide permitting and code services. Due to vacant positions and turnover our permits were delayed and code enforcement officers were inundated. This directly impacts the quality of life around our community.

Many people think why not contract out for services. There are major issues with this concept. When you contract out for a service there is a loss of control, automatic increases in fees and they are difficult to get out of. People often forget cities are not for profit entities. Since we can run like a business, we should be able to do it better and for less because we can save and pass the savings onto the residents.

The former mayor and commission contracted out the management of our EMS and Fire. I need to note our Department was operationally sound and on its way to be certified. It was pushed as a way to increase the level of services and put more boots on the ground. In actuality, the increase in staffing came from a federal SAFER grant. The level of service is less and it is costing us more! We lost our emergency management position as the BSO division director does not provide this position. Many of our staff left, as they could transfer out to other BSO cities. We are now a training ground. The contract costs us over a million dollars annually that we are aware of since we cannot audit the BSO. We still pay for our fire and EMS trucks, building maintenance, equipment and still have legacy pension costs.

I do know that people are struggling and our commission is very sensitive to increasing taxes and fees. Our readers need to understand that we live in the City too. What we do on the dais directly impacts us. Our costs to operate are not fixed. Your commissioners and I along with staff are working hard to provide services in the most cost effective way.

As always, I am available for your questions, concerns and ideas to help make our City a better place. Please feel free to reach out at my office: (954) 457-1318. On my cell/text at: (954) 632-5700. Or E-mail me at: jcooper@cohb.org.