The Doral city council has approved a three-cent reduction of the proposed property tax rate from $1.93 per $1,000 of taxable value to a rate of $1.90 — giving Doral the second-lowest property tax rate in Miami-Dade after Aventura.
Even though the rate of $1.93 was the same as last year, if it were not for the reduction, Doral would have had to advertise the proposal as a tax increase because of the citywide increase in property values.
The resolution, pushed by Mayor Luigi Boria, faced some opposition in the budget talks that led up to the final meeting on Sept. 23, but ultimately the reduction passed by a vote of 4-1. The 2015-16 budget was approved by a vote of 3-2.
“Personally, I think it should be even lower than that,” Boria told the Miami Herald on Monday. “This is a big incentive we can give to people coming to live in our city.”
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Doral has $74 million in reserve funds, the city has an operational surplus of $6 million, and the tax reduction will cost the city roughly $250,000 in tax revenues, according to comments made by council members.
The city will take $16.9 million from its reserves for capital improvements this year.
During the meeting, Boria referred to annexation efforts as a rationale for reducing the tax rate. Doral, over the past few years, has been focused on expanding its territory, which would bring the city added revenue, but also would increase the cost of services to those new areas.
Boria believes the city will be able to recoup the revenues lost from the tax reduction in other areas, and has even considered tapping into the reserve to give money directly to residents.
“The reality is that we also have things like business and occupancy permits that represent more revenues to the city aside from [property taxes],” Boria said. “With the amount of money we have right now, we can give back $3,000 to each homeowner. At one time, I considered giving back half of that.”
During the preliminary tax rate meeting in July and the first budget hearing in September, it seemed as though Boria did not have the support of the council. The same issue, at the first budget hearing, raised debate.
Boria and Vice Mayor Sandra Ruiz, during the first budget hearing, repeatedly bickered about the tax rate and Ruiz accused Boria of constantly interrupting her while she spoke.
“I think what we need to do is be more aggressive in moving our projects forward so that our residents can enjoy them during their lifetime and while our kids can still enjoy it,” Ruiz said at the first budget hearing.
Ruiz voted in favor of the reduction last week, citing the large amount of money in the city’s reserves.
As recently as last week’s final hearing, Councilman Pete Cabrera described himself as “fundamentally opposed” to lowering the property tax rate minutes before he voted in favor of lowering the property tax rate.
Councilwoman Christi Fraga also advised against lowering the tax rate, but ultimately decided to vote in favor of the reduction as part of an effort by the council to show a “unified front.”
Councilwoman Ana Maria Rodriguez was the dissenting vote.
“We need to be looking at how to replenish the funds that we are using, as we are using them, so that we are able to continue investing in our community as it continues to expand,” Fraga said.