When preliminary tax rolls rose this July to around $200 billion countywide, most of Miami-Dade County’s government agencies embraced the prospect of finally having more dollars to spend after years of making do with less. But there’s some uncertainty to go with the celebration.
Because sending out a tax bill is one thing. Collecting on it is another. And the agencies that rely on property taxes are finding the payments a little light these days.
The city of Hialeah, for instance, expects to receive only about $9 of every $10 billed for the fiscal year that will close at the end of this month. Miami-Dade County expects the difference between collections and billings to be $20 million. And last month, the Miami-Dade school district scrambled to shore up its books after learning that the $45 million shortfall it already expected for the prior school year was about 50 percent too low.
The issue isn’t new: Miami-Dade taxing authorities have found collections problematic since the real estate bubble collapsed and the number of tax appeals soared. But there’s a consensus that this year the predicament has been particularly pronounced.
“It’s something we’re losing sleep over,” said Judith Marte, the school district’s deputy chief financial officer. “We’ve got to get our hands around it.”
Government agencies like municipalities, counties and local school boards rely heavily on property taxes to fund their operations. Each July, the Property Appraiser’s Office certifies preliminary tax rolls, which taxing authorities use to set their tax rates and the coming year’s budget.
But tax payments are not due until March, and often bills are tied up in appeals for a year or more. For that reason, agencies don’t actually budget 100 percent of what the property appraiser tells them they are owed. Usually, it’s more like 95 percent, the lowest percentage allowed by state law.
Historically, however, tax collections in South Florida struggle to hit that mark. And this year the Miami-Dade school district says collections came in at about 92 percent. Hialeah is expecting the number to be even lower.
“This year we’re budgeting 90 percent,” said Budget Director Ines Beecher, who said the city expects shortfalls that are typically around $1 million to reach $3 million by year’s end. “That’s huge in a city that needs it.”
So why are collection rates coming in so low this year?
For one thing, the tax rolls remain volatile. While appeals are not as numerous as they were in the trough of the recession, when they numbered around 175,000, Miami-Dade Property Appraiser Carlos Lopez-Cantera said more than 70,000 were filed in 2012. About 64,000 are still pending before the county’s Value Adjustment Board.
But budget gurus point specifically this year to a bottleneck: The Miami-Dade Tax Collector’s Office recently switched to a new electronic system, and Tax Collector Fernando Casamayor said his office has filed and processed a slew of appeals and refunds to try to get current.
“We’ve had more than 12 months worth of refunds happening within the last fiscal year,” said county Budget Director Jennifer Glazer-Moon. “This is a problem this year.”
Compounding and spurring the influx of cases this year, said Casamayor, every refund is now actually two refunds.