After years of tussling with the Homeless Trust over its exemption from paying a share of the food and beverage tax that funds homeless and domestic violence services, Miami Beach says it will contribute money it has collected from property owners who operate illegal vacation rentals.
But the amount is far less than would have been generated by expanding a 1 percent tax on restaurant bills to include Miami Beach, and the Miami-Dade Homeless Trust wants the city to pay more.
Last week, the Miami Beach City Commission pledged to give the Trust $500,000 collected from short-term rental fines. Miami Beach aggressively enforces a ban on short-term rentals in most residential areas, and violators face steep fines starting at $20,000. The city has collected more than $512,000 in fines over the last four years but hasn’t yet spent the money.
Miami Beach, Bal Harbour and Surfside are currently exempt from a 1 percent tax tacked onto restaurant bills in Miami-Dade County’s other 32 municipalities. Eighty-five percent of the tax goes to the Homeless Trust and the other 15 percent pays for domestic violence programs. The three coastal cities were exempted from the tax when the Florida Legislature created it in 1993 because they already had restaurant taxes that went toward municipal services.
Now, however, the Trust said it needs more money to provide the homeless with permanent housing and advocates say there aren’t enough spaces for victims of domestic violence in Miami-Dade shelters. The Trust has been urging Miami Beach, Bal Harbour and Surfside to support an expansion of the tax, which would require approval from the Florida Legislature. The organization estimates that levying the tax in the three coastal cities would generate between $5.5 million and $6.5 million a year.
When Miami Beach commissioners discussed the idea in March, however, business groups argued that it would drive customers away from the city’s restaurants, which are already subject to a 9 percent food and beverage tax rate — the highest in the state. The county tax applies to restaurants that have a liquor license and whose receipts total at least $400,000 a year, with the exception of restaurants attached to hotels.
Instead, Miami Beach will send the Trust $250,000 a year for the next two years in money collected from short-term rental fines to help pay for domestic violence and homeless services. Once the short-term rental fines are depleted, commissioners said they would consider giving the Trust a portion of the money Miami Beach collects from resort taxes starting in 2021. City officials expect that the newly remodeled Miami Beach Convention Center and a planned convention center hotel will boost resort tax revenue.
The proposal, which commissioners plan to discuss at an upcoming budget workshop, would cap the city’s future contributions to the Trust at just under $2 million a year, which is less than would have been generated by expanding the 1 percent tax. City officials arrived at the $2 million cap by calculating the city’s per capita share of Trust funding based on population.
Ron Book, who heads the Trust’s board, said he was pleased that Miami Beach had decided to contribute, but had hoped the city would make a larger contribution. The Trust estimates that levying the 1 percent tax on restaurant bills in Miami Beach would generate approximately $4.5 to $5 million.
“We’re extremely happy that they have agreed to help, that they have agreed to participate. We just frankly had hoped for something more robust,” he said. “We hope that as time goes on we will have some opportunity to grow that going forward.”
Miami Beach runs its own homeless services programs, which cost the city $3.2 million a year, and spends $150,000 on services for victims of domestic violence. The city doesn’t currently contribute to the Homeless Trust, but the Trust provides Miami Beach with access to 40 shelter beds as well as grant funding and indirect services. Money from the 1 percent tax also funds services used by local victims of domestic violence.
“We are a major donor to Miami Beach’s effort to end homelessness,” Book said.
The Trust estimates that 15 percent of the homeless people living on the streets of Miami-Dade County are in Miami Beach. The organization’s annual point-in-time count found that the city’s homeless population had spiked this year. According to Miami Beach’s figures, however, which are measured differently, the number of homeless people living in the city has decreased in recent years. Miami Beach said that 95 percent of the city’s homeless population became homeless elsewhere before moving to the island.
Commissioner Ricky Arriola, who had pushed for an expansion of the 1 percent tax, said the planned $500,000 contribution to the Trust was a good “first step.” He said he’s still considering asking his colleagues to put a question on the November ballot to let residents decide whether to urge the state Legislature to expand the tax to Miami Beach.
Valerie Navarrete, a local activist, said she agrees with the city’s plan to use short-term rental fines for homeless services.
“I think it’s a great idea towards finding a solution towards ending homelessness because at the end of the day it’s all about money,” she said. “Permanent housing is the most important thing, that’s the start, and you can’t have permanent housing if you don’t have money to either pay for rent or to build the housing.”
Navarrete said she wouldn’t be opposed to putting the 1 percent tax on the November ballot, but would rather see the money come from resort taxes or other sources.
Meanwhile, Bal Harbour and Surfside have indicated that they want Miami Beach to go first before they would be willing to support an expansion of the 1 percent tax. Surfside has pledged $50,000 to the Homeless Trust, which the Trust said will go toward a new housing program for homeless people with mental illness. That initiative is also supported by $100,000 in state funding.