Most of Miami-Dade County’s windfall from rising property values will go to cover raises for the government’s 26,000-person workforce, thanks to a 4 percent boost in pay negotiated by union leaders and the administration of Mayor Carlos Gimenez.
Figures provided by the county’s budget office show the 9.1 percent growth countywide in property values that was announced on July 1 should generate about $38 million above the $90 million in new revenues expected in the original 2017 forecast.
That original forecast predicted a 6.5 percent increase in values countywide. The higher figure triggered a string of pay raises Gimenez had pledged unions in recent years if Miami-Dade’s economy continued to improve.
Miami-Dade’s budget office said a 4 percent cost-of-living increase mandated in eight union contracts, including three approved this week for firefighters and police, should eat up about $32 million of the extra property-tax money. That leaves about $6 million from the property-tax windfall to spend on new initiatives, or less than 1 percent of a revenue source that tops $1.6 billion.
Sign Up and Save
Get six months of free digital access to the Miami Herald
Property taxes are the single largest source of revenue for funding general government services such as police, roads, transit and social services. But with nearly $7 billion to spend across the budget — including the $91 million growth in property-tax revenue already baked into the 2017 forecast from 6.5 percent growth — Gimenez still has other revenue sources to mine for new initiatives and service expansions.
Property taxes are the single largest source of revenue for funding general government services such as police, roads, transit and social services.
The preliminary math assumes Gimenez follows through with plans for flat property-tax rates in the 2017 budget he plans to release Monday morning. It also demonstrates the significant investment in boosting worker pay in an election year, with Gimenez facing an Aug. 30 primary vote in his bid for a second, and final, four-year term.
Most of this year’s expected property-tax windfall was essentially pledged to the raises in 2014. That year, Gimenez faced the expiration of union contracts across the county, with labor leaders demanding raises as Miami-Dade enjoyed rising property values and an improved economy.
Gimenez came to office in 2011 on promises of a tax cut to reverse an increase his predecessor, Carlos Alvarez, imposed amid a real estate crisis that sent government revenues plunging. Gimenez’s 12 percent cut extended the county’s austerity measures as revenue declines forced more staff reductions and service cuts as Miami-Dade emerged from a national recession.
He helped pay for the rate cut with union contracts his new administration negotiated in 2011, which included pay cuts and other concessions. Those agreements expired in 2014, and Gimenez negotiated new agreements with five unions that restored most of the concessions, including a payroll deduction for healthcare costs, lost holiday pay, and other pay boosts surrendered in 2011.
“Back in the recession, many public-sector workers had to give a lot of concessions, including having their salaries decreased,” said Cynthia Hernández, spokeswoman for the South Florida AFL-CIO, an umbrella group representing multiple government unions. “These cuts were basically put on the back of public-sector workers, even though they weren’t the cause of the recession.”
The AFL-CIO last week endorsed Gimenez’s main challenger, school-board member Raquel Regalado, citing the mayor’s privatization efforts and staffing cuts. The next day, three union chapters within the AFL-CIO, AFSCME chapters representing sanitation, airport and other county workers, endorsed Gimenez. Each had ratified new contracts with the county in 2014.
In a statement, Regalado said “This budget is an election year taxpayer bailout of Carlos Gimenez’s mismanagement.”
In other circumstances, I would be pushing to reduce tax rates. But I think the county employees have carried a lot of the burden for the cuts.
County Commissioner Esteban “Steve” Bovo
Though the three-year deals that five unions ratified in 2014 restored most of the 2011 concessions, Gimenez still faced demands for pay raises to make up for past compensation cuts and lost raises. In 2014, he offered unions contracts that would delay automatic cost-of-living increases until property values exceeded growth targets. Though the formula involved various categories of county property values over multiple years, the raises essentially kicked in with the release of the July 1 property-value report.
“Mayor Gimenez kept his promise to our labor partners,” spokesman Michael Hernández said. “He asked for them to sacrifice during very challenging fiscal times and committed to restoring benefits and budgeting cost-of-living adjustments for employees when the budget outlook improved. That’s what he has done.”
The latest surge in values reported by the Property Appraiser’s Office in a preliminary estimate released June 1 also jump-started stalled talks with the police union, which represents two of the five bargaining units that rejected Gimenez’s 2014 offers. Gimenez officials were already in talks with fire union officials about a contract to run through the 2017 budget year, which begins Oct. 1.
On Wednesday, county commissioners approved new contracts with the police and fire unions that include the 4 percent raises next year that the other unions tied to higher property values two years ago.
Combined, the firefighter and police contracts are expected to add about $52 million a year to the county’s nearly $7 billion budget. As was the case with other unions’ agreements, county budget writers had already planned to cover some of the new employee costs with the higher property-tax revenue generated from the prior estimate of 6.5 percent growth.
Unlike merit raises, cost-of-living increases would kick in automatically for covered Miami-Dade employees in 2017 without approval by a supervisor. The last time Miami-Dade workers received one was in the summer of 2011, before Gimenez’s first budget took effect on Oct. 1 of that year.
Gimenez’s 2017 proposed budget is expected to extend the 4 percent raise to most non-union workers, though he has held back perks to his top aides in past spending plans. Two unions who still have not agreed to a contract, those representing transit and water-and-sewer unions, would not get the raises without agreeing to new deals.
Since county commissioners approved the upcoming raises with their votes on the existing contracts in 2014 and this week, there’s little the 13-member body could do to oppose Gimenez’s cost-of-living proposal. Esteban “Steve” Bovo, a commissioner who consistently calls for lower property-tax rates, said he favored the higher spending for county workers in 2017.
“In other circumstances, I would be pushing to reduce tax rates,” he said. “But I think the county employees have carried a lot of the burden for the cuts.”