Everything On Table As Dade Stares Down Potential 400 Million Hole
Written by Risa Polansky on June 4, 2009
By Risa Polansky
The largest drop in local property values in decades, combined with plummeting non ad valorem revenues, could mean an up-to $400 million hit to Miami-Dade County’s budget in the upcoming fiscal year.
And when it comes to balancing it, "everything is on the table," elected leaders say.
The $350 million to $400 million estimate is based on this year’s tax rate, according to a Monday memo from County Manager George Burgess.
Commissioners could help close the budget gap by raising the rate next fiscal year — and it’s not out of the question for some.
"Everything has got to be on the table at this particular point in time," Commission Chair Dennis Moss said Monday, after Property Appraiser Pedro J. Garcia released property tax roll estimates.
The preliminary tax roll shows an about 9.2% decline in countywide taxable value since last year.
The final, certified tax roll is expected July 1.
"This is going to be a very difficult budget year, and we’re going to have to take a look at all of the funding priorities and make some decisions and some choices," Mr. Moss said.
His priorities: maintaining county jobs and essential services.
And to do it, he’s not ruling out raising the tax rate.
"My priority [as chair] is to make sure that we are able to keep people employed. I don’t want to see us contribute to the unemployment problem here in Miami-Dade County, so that’s going to be a key factor for me," Mr. Moss said. "Everything is on the table, but my main priority is to make sure we keep people employed, we keep our workforce intact as much as we can."
Commissioner Katy Sorenson, chair of the county’s Budget, Planning & Sustainability Committee, said Tuesday that commissioners will have to consider three different scenarios: cut the full $350 million to $400 million, raise taxes and cut less, or raise taxes enough to maintain services.
Possible higher tax rates, potential layoffs, potential department closures — "all of that is going to be in the mix," Ms. Sorenson said.
"While we cut last year and the previous year, this is the most significant cutting we’ve ever had to do," she said. "People’s jobs will be on the line and services for the public will be on the line. All options have to be on the table until we duly examine what the repercussions are."
Commissioner Carlos Gimenez said Monday he’d refuse to support a tax rate hike.
"My mindset is that everything is on the table," Mr. Gimenez said. But "I am not leaning in any way, shape or form to increasing taxes."
To help close a $200 million budget gap last year, county leaders voted to lower the tax rate for fire, libraries and the unincorporated municipal service area but raise the countywide rate to keep the combined millage the same as the year before.
The move lowered taxes for most residents but raised them for some, namely municipality dwellers.
At the time, Mr. Gimenez opposed the plan and proposed his own budget, balanced without any tax increases.
"I’m sure we’re going to have the same debate again this year," he said.
But during a recession, supporting a tax increase isn’t an option for Mr. Gimenez.
"People today are having difficult times economically… they don’t have the luxury of giving themselves raises like government does. I think we need to set the example," he said.
Some ideas: freezing wages, reducing wages or potentially cutting jobs.
It’s time to "eliminate some bureaucracy," Mr. Gimenez said, and prioritize keeping people on the street providing services.
"I think there has to be fundamental changes in the way we do business," he said.
Manager Mr. Burgess in his memo said cuts alone won’t close the budget gap without killing completely some county departments and programs.
"One fact is almost certain: a budgetary gap of this magnitude cannot be closed through expenditure reductions alone without seriously impacting our core services," he wrote.
Nor will simply increasing revenue.
"At this point, we firmly believe that, as we have done in the past, through a combination of targeted service adjustments and necessary revenue increases, we will be able to structure a balanced budget that preserves needed core services for our citizens," the Burgess memo says.
Ms. Sorenson said it’s essential taxpayers weigh in and understand the budget process.
Leaving the tax rate alone would mean cutting services, she said, citing as an example the county’s parks department, which recently won an award from the governor.
"Now, if we’re going to cut our parks significantly, these services will go away, and people will see the difference," she said.
When it comes to balancing the budget, "I think we’re going to have to hear from the public on these issues, and people are going to have to understand the real implications of these cuts."
Folks also may have trouble understanding valuations, said Ron Shuffield, president of Esslinger Wooten Maxwell Realtors.
Because Jan. 1 is the property appraiser’s baseline, and home prices have continued slipping this year, property owners may not see the reductions they expect, he said.
"People need to remember that tax assessments are usually a year delayed because of the very nature of how they assess property," he said.
Assessed values could be higher than real values, as valuations reflect "last year’s decreases, not what we’ve seen since then," Mr. Shuffield said.
That could mean disappointment for homeowners.
"I think a lot of people are not going to understand why it’s not already appearing in this tax roll."