County Analysis Projects 12 Tax Base Increase In 2007
Written by Dan Dolan on December 14, 2006
By Dan Dolan
Despite a cooling real estate market, Miami-Dade’s property tax base will grow 12% next year, according to a financial analysis released by county government this week.
And that’s good news for residents, businesses and government, county officials say, because a growing tax base helps keep a lid on property taxes and fosters economic development.
"Miami-Dade’s county government is in good financial shape," said Jennifer Glazer-Moon, the county’s budget director. "This is a positive thing for businesses since it allows us to provide effective services that attract customers."
Ms. Glazer-Moon said the county’s $145 million surplus in one of the major keys to its financial health. At the moment, she said, Miami-Dade has $104 million in a general reserve and $41 million in a special emergency reserve fund.
Next year the general reserve will remain about the same, she said, but the emergency fund will swell to $61 million in accordance with a plan laid out three years ago by County Manager George Burgess.
"Our goal was to reach $120 million in emergency reserves within seven years," Ms. Glazer-Moon said. "We will achieve that in five years due to the incredible growth we’ve experienced in our property tax base."
General reserve money will help the county continue services without raising taxes when property tax-base growth returns to normal — about 6% a year, Ms. Glazer-Moon said. Last year, the county forecast a 14% growth in its property tax base. She said the actual number came in closer to 22%.
Ms. Glazer-Moon said the general reserve can be tapped for new services or one-time expenses. The emergency reserve is harder to dip into, she said. By law, that fund
may only be used in crisis situations — like the aftermath of a hurricane. Spending money from the emergency account requires approval of nine members of the county commission instead of the usual simple majority, she said.
"The best way for us to benefit from the growth was to prepare for a time when there wasn’t any," Ms. Glazer-Moon said. "We budgeted for reserves rather than fund new services that we wouldn’t be able to sustain if things change. It’s important to have a rainy day fund. It’s sound planning that helps make it cheaper to borrow money, which means we can get more done with our general obligation bonds."
County Finance Director Rachel Baum agrees. She said Miami-Dade is maintaining its investment grade AA-minus bond rating and believes the rate may be upgraded to AA or AA-plus in the next year or two.
"It’s a marvelous thing that the board enacted the emergency reserve and is putting money into a general reserve," Ms. Baum said. "It means when the county issues bonds, we will get a lower interest rate. As our reserves continue to grow, we feel very comfortable Miami-Dade will be able to meet all its obligations in the event of an economic downturn."