Miami-Dade County’s property tax base expanded 6.5 percent from last year, the biggest gain since the historic real estate crash crippled the region’s economy and sent local governments scrambling to make ends meet.
“The urban core and the waterfront are leading the charge. Those areas are stronger than the western suburbs and the southern end of the county,” Miami-Dade Property Appraiser Lazaro Solis said Friday. “We seem to have a pretty strong real estate market. We have a turnaround even in depressed areas — though we still have small pockets where values declined.”
For some municipalities, the bigger-than-expected growth in the tax rolls provides some breathing room in hammering out budgets for the fiscal years beginning Oct. 1. But for others, notably Miami-Dade County — which is confronting an overall budget gap of about $200 million going into the next fiscal year — the larger tax base won’t begin to plug the hole.
Among the municipalities enjoying robust gains are Miami Beach (9.4 percent), Surfside (17.6 percent) and Sunny Isles Beach (11 percent). Those with weaker results include Florida City (down 1.3 percent), Opa-locka (down 1.5 percent) and Medley (down 2.6 percent).
“The more affluent neighborhoods are doing better than the non-affluent neighborhoods,” Solis said. Liberty City and the north-central swath of the county, for instance, are struggling more to recover from the precipitous plunge in values during the bad years from 2008 through 2011.
Miami-Dade’s overall property tax roll, which includes more than a million properties, was $209,937,000,000 as of Jan. 1. That’s just shy of $210 billion.
In addition to real estate, the tax roll reflects changes in tangible personal property. FPL’s investments in the nuclear power facility at Turkey Point, for instance, added about $500 million to the tax base, Solis said.
The preliminary property-tax values are used by cities and taxing districts when forming their budgets for 2014-15 and setting millage rates — the tax due per $1,000 of taxable value.
“Hopefully, it will give commissioners some options for addressing some needs in the community,” Miami Beach city manager Jimmy Morales said. “It gives us some flexibility as we approach the new year.”
Miami Beach could dedicate some of the increase to expensive projects it has undertaken to mitigate flooding and issues related to sea-level rise, Morales said. In February, the city decided to use higher tide estimates when it comes to building city projects, and to install new pump stations to suck water out of the streets — all at a cost of about $400 million. On the other hand, the increase could allow Miami Beach to reduce taxes, making up for increases during the height of the economic crisis.
Elected officials, he said, can decide on “either addressing some enhancements, or giving it back to the taxpayers.’’
For Miami-Dade, Friday’s report was a pleasant surprise but not a game changer. Budget forecasters predicted a 4 percent increase rather than the 6.5 percent gain. Miami-Dade’s budget office said it hadn’t yet determined how the new estimates would impact revenue forecasts, though a quick stab at the fresh numbers suggests a gain of around $20 million.
“It's welcome,” said Hugo Salazar, the deputy budget director. “It still leaves a big challenge.’’
In a statement, Mayor Carlos Gimenez warned that the rosier revenue outlook wouldn’t deter him from demanding concessions from unions, including a proposed 10 percent pay cut and benefit reductions. The “net improvement is still not enough to avoid significant reductions to the county's operating budget,” Gimenez said. “Additionally, the growth is not enough to offset increased personnel costs brought on by the collective bargaining agreements.”
Aventura City Manager Eric Soroka was pleasantly surprised with the city’s estimated property tax base increase of 7.3 percent, well above the 4 percent rise the city was anticipating. Excluding new construction, property values rose 5.8 percent in the high-rise haven. New construction added $113 million.
Soroka said it’s too soon to say what the bigger tax roll might mean for its plans.
For some other cities hard hit by the downturn, the news of the 2014 tax roll wasn’t sweet at all.
Otis Wallace, mayor of Florida City, where the tax roll dwindled 1.3 percent this year, said one problem with its continually declining property values is that owners keep appealing their valuations.
“We have a substantial commercial base,” Wallace said. “People have been filing appeals with lawyers that guarantee results, and the county has been fairly liberal in granting appeals.”
Wallace cautioned preliminary estimates are sometimes wrong, but added he wasn't worried, since the city saved plenty during the boom years.
Miami-Dade Schools Superintendent Alberto Carvalho said the increase in property values makes it highly unlikely that the school district tax rate will need to be increased, but he cautioned that rising home values won't be a windfall for the school system. Through the complicated local/state funding formula for schools, each year the state determines how much local taxpayers are expected to contribute. It is the state, in fact, that primarily sets school district millage rates that show up on your property-tax bill.
If Miami-Dade Schools generates more money than expected through higher home values, Carvalho said, the state can then reduce the amount of money that it contributes for schools — making any gains to the school system “quite negligible,” he said.
Despite the big gains in property values in some areas, homeowners with homestead exemptions will see their assessed value rise a maximum of 1.5 percent this year, based on the Florida Save Our Homes amendment. The amendment caps increases in the assessed value of homestead property to 3 percent or the consumer price index, whichever is lower. For non-homestead properties, increases in assessed value are capped at 10 percent a year, under Florida law.
This marks the third consecutive year that property values have risen after four years of declines during the devastating housing crisis that upended the region’s economy and forced local governments into controversial and painful budget cuts.
The countywide tax roll increased 5.6 percent before adding $1.79 billion of new construction last year. New construction is added to the tax rolls when projects are substantially complete, typically when they receive a certificate of occupancy or a certificate of completion, the property appraiser said.
The property appraiser’s preliminary report — which will be fine-tuned and finalized by July 1 — underscores the unevenness of the real estate recovery in South Florida.
“Waterfront neighborhoods … continue to show a strong real-estate market with double-digit growth. Some parts of the county that were hit the hardest during the recession, like Hialeah, Homestead and El Portal, have also experienced the most substantial growth in 2014. However, Opa-locka, Florida City and Medley have still not fully recovered and continue to see a decline in property values,” Solis said in a statement.
While Hialeah posted a 4.7 percent gain in property values for this year, that marks a major upward swing from 2013, when values fell 3.5 percent.