Florida's (State) Tax Collections expected to fall sharply. Palmetto Bay council should reconsider its stealth property tax increase for this budget year.

I have not been involved as much I would would like in Palmetto Bay since completing my two terms as founding Mayor. I am bringing more information to the present Village Council's attention and ask them to reconsider their budget decision to remove and spend $1,500,000.00 taken from the village reserves.  I read Grant Miller's recent opinion published in the Palmetto Bay News: Taxpayers: Watch the Village checkbook and I must say that I share many of the same concerns.  We are in a much darker economy than Palmetto Bay enjoyed for its initial eight years and we have to rein in spending, especially where we are now on our own financially, no assitance from Tallahassee in grants and appropriations for projects. 

 

Florida Trend reported an AP source on the Tuesday afternoon update (CLICK HERE to read the short, directly from the source) that State tax collections expected to fall sharply, by $1.3 billion to $1.7 billion over the next two years.   This same AP story was published both online and in the Wednesday edition of the Miami Herald: State tax collections down $1.5 billion, by Mary Ellen Klas, Herald/Times Tallahassee Bureau

Economists began meeting Tuesday to draw up a new forecast on state tax collections amid signs that Florida's economy has been stalling over the last few months. The issue is whether more cuts will be needed in 2012 to schools, health care and other state programs.

This is an obvious sign that there will again be no money available for appropriations to local government. Under my leadership as founding Mayor, the original Palmetto Bay Council brought home well over $18 million in Grants and Appropriations to assist in the capital improvement program over Palmetto Bay's first 8 years. The current council brought zero back this last legislative session so I am asking the current village council members to reconsider taking $1,500,000.00 from the village unallocated reserves for new capital projects. 

The current economic information is telling us not to expect strengthening revenues for the foreseeable future. Now is not the time to spend from reserves for non-essential capital construction projects.

The present calculation is that $5,771,680 will be raised by Palmetto Bay from our property taxes. This sum, plus the other revenues received, are not sufficient for this current Mayor and council to spend on present level of services and the optional capital improvements. That is why the Mayor and Council voted to take a whopping $1,500,00o.00 out of reserves, our hard fought savings.  To demonstrate the magnitude, this $1,500,000.00 is more than 25% of the total property tax monies received from us, the taxpayers for the upcoming year.

Would you have voluntarily increased your Palmetto Bay property taxes by 25% to pay for this upcoming year's expenses? I bet you would not have. The current mayor and council decided to take the money from savings and deplete the reserves rather than ask you for a tax increase.

This is really a stealth 25% tax increase.
 

To be fair two council members, newly elected Patrick Fiore and Howard Tendrich, fought against taking the entire $1,500,000.00 from reserves.  Unfortunately they are only 2 of 3 votes of the council. 

Regardless of the intentions of the minority votes, everyone should acknowledge that this type of spending, dipping into reserves for non-essentions/non-emergencies, cannot continue or we will soon find ourselves without and emergency reserves.

The Village of Palmetto Bay’s main revenue source is Ad-Valorem taxes which has been severely impacted in the last couple of years by drop in assessed home values. "Stabilization" is a relative term in that for this coming year, success being marked by the statement that the decrease in assessed values has slowed considerably to only a 1.28% decrease.

The budget notes that other major revenue categories are Utility Taxes, Intergovernmental Revenues, and Franchise Fees. Intergovernmental Revenues are showing a decrease due to the relocation of restricted Transportation Taxes to the Special Revenue Funds. Utility Taxes are expected to be flat for FY 2011-2012. Electric Franchise fees will have a 32% drop in revenues or a $427,810 reduction in the FY 2011-2012 receipts. 

Total General Fund Revenues have decreased $1,056,193, not including the relocation of Transportation Taxes.

Most significant, but not disclosed by this current Mayor and council is the fact that the village was shut out of any grants or appropriations from the State or Federal Government this year. This means Palmetto Bay must fund any improvements entirely from its own tax base.

All teh information above should be very obvious warnings to this council that non-essential spending should be cut and budget priorities revised to meet with the current realities.  Instead this council appears to be spending oblivious to the economic realities and hoping that next year improves.  Ahem, helllooo, read the paper, including the links above, no dramic economic upturn is reasonably expected. 

It is easy to spend money. Over $9,500,000.00 in unallocated reserves were saved by the intial Palmetto Bay Council for emergencies over the first eight years. The fact that this much was saved is even more astounding when you consider that Palmetto Bay had the additional mitigation liability of $1,700,000.00 per year for the first 84 months of Palmetto Bay's existence.  The savings were hard fought.  Should it be spent by this current government because it is there?

This present Mayor and Council should guard, not spend, the reserves. That money was not put away for non-essential spending. It looks like Palmetto Bay may hit financial urgency next year and if so, it will be due partly to the current council's failure to address the realities in this current budget.