CRA head: Property tax reform will bite into pet projects
By Risa Polansky
Imminent statewide property-tax cuts are sure to slice local community redevelopment agencies' budgets, bringing infrastructure improvements and affordable housing to the forefront and lessening the likelihood that projects such as a port tunnel or the Carnival Center for the Performing Arts will have a chance to reap the benefits of agency funds.
Paying outstanding bonds, following through on planned infrastructure improvements and contributing money to affordable housing top the agencies' list of priorities, said James Villacorta, executive director of Miami's Omni, Midtown and Southeast Overtown/Park West agencies.
That leaves pet projects the city and county have been eyeing funds for on the back burner.
At a national Council of Development Finance Agencies summit in Miami Beach last week, experts advised businesses not to lend money to or undertake projects funded by Florida community redevelopment agencies until the state Legislature makes a call on property tax reform during its June special session as tax cuts could significantly affect the agencies' revenues.
Though cuts of an unknown magnitude are coming, Mr. Villacorta said, he is relieved they won't be as severe as originally thought when elimination of property taxes was on the table.
Now "we'll have some money available for projects," he said.
Tax rates in a redevelopment agency's district are capped, and as property values rise, the increment above the cap is collected to fund the agency, which in turn makes improvements to the area.
Proposals to exempt large portions of a property's valuation from taxes are gaining favor among legislators.
A proposed plan to exempt property taxes on as much as 80% of the first $300,000 of a primary home's value would cause the Southeast Overtown/ParkWest and Omni redevelopment agencies to lose $4.5 million in 2008 and, looking ahead, $7.5 million in 2012, said City of Miami Budget Director Michael Boudreaux.
Mr. Boudreaux said another reform plan calling for doubling of homestead exemption and a rollback of millage rates would lose the Omni and Southeast Overtown/Park West agencies $393,373 in tax increment funding next year and $791,360 in fiscal 2012.
Once property tax reform measures are formally enacted by the state, the local agencies are to "make adjustments accordingly" in setting future budgets, Mr. Villacorta said.
"There will be money — maybe not always the golden pot people think, but there will be money" said Miami City Commissioner Tomás Regalado, who sits on the agency boards along with the rest of the commission. But "to think the CRA will be able to supply $50 million to the tunnel or $7 million to the performing-arts center is wishful thinking."
This year, the Southeast Overtown/Park West redevelopment agency garnered $5.4 million in tax increment revenue, the Omni district $11.5 million and Midtown $122,256, according to Miguel Valentin, the agencies' financial officer.