Palm Beach agrees to hold tax rate steady, sets $119M budget for upcoming fiscal year

The Palm Beach Town Council agreed to maintain the town's current property tax rate during a budget workshop July 11 at Town Hall.

Expressing concerns about funding for future capital improvement projects, council members voted to keep the town's millage rate where it is rather than lower it for the upcoming fiscal year, which begins Oct. 1.

This year's property tax rate is $2.61 per $1,000 of taxable value. A proposal presented by Town Manager Kirk Blouin at the workshop would have lowered it to $2.53 as part of a proposed $116.7 million budget.

Related: Palm Beach's property values jumped 10.6% over last year, property appraiser estimates

Council members considered the proposal before following Mayor Danielle Moore's cue and voting unanimously to maintain the current tax rate and approve a tentative $119.1 million budget for the 2024-25 fiscal year. Formal adoption for both is scheduled for September.

Moore shared concerns about budget shortfalls the town could face because of expensive capital improvement projects that need to be completed in coming years.

Those projects include street paving as part of the town-wide utilities undergrounding project ($4 million); Royal Poinciana Way median improvements ($1 million); and town drainage improvements in the canopy area on North County Road ($4 million)

"Lowering the millage rate is optics, and it makes us feel good and our residents feel good," she told council members following a budget presentation by Bob Miracle, the town's deputy town manager for finance and administration. "But I think, looking out to the future … the more we put off these projects, the more they cost the next year or the year after, or however long it is. We're going to need those resources, and I'd rather hold the line now rather than getting to next year or the year after and have to significantly increase the millage rate."

Town Manager Kirk Blouin noted that inflation costs, particularly for labor and materials in the South Florida construction market, have impacted funding for the town's capital improvement projects.

"Some of the biggest challenges going forward are obviously, the high inflationary environment we're experiencing here in South Florida, particularly as it relates to construction costs for our capital improvement projects today, last year's budget, and going forward," Town Manager Kirk Blouin told council members. "It does provide some challenges as we try to balance the budget."

If the council maintains the current millage rate for the next fiscal year, owners of homesteaded properties would pay the town $79 more per $1 million of taxable value, Blouin said. Non-homesteaded properties would pay $249 more per $1 million.

The proposed budget for fiscal year 2024/25 represents a 13% increase over this year’s $104.8 million budget. It includes $11.9 million in major spending increases, with nearly $3.6 million of that earmarked for employee pay increases and for 13 additional employee positions.

The new positions are four firefighter/paramedics, a fire inspector, a police officer, police sergeant, three parking enforcement officers, a tennis manager, an information technology project manager, and an administrative assistant.

The pay increases include merit and step increases, market adjustments for police and firefighters, and a 5% cost-of-living adjustment for inflation in the regional market, the town said.

Additional spending increases include $2 million for an increase in obligations to the retirement program; $1 million for health care and other employee benefits; $1.4 million for contractual costs, and $3.9 million in additional transfers into the capital improvement fund, Miracle said.

The proposed budget and tax rate will be finalized at two state-required public hearings, which are tentatively set for Sept. 11 and Sept. 19.

Jodie Wagner is a journalist at the Palm Beach Daily News, part of the USA TODAY Florida Network. You can reach her at jwagner@pbdailynews.com. Help support our journalism. Subscribe today.

This article originally appeared on Palm Beach Daily News: Palm Beach agrees to hold tax rate steady as part of $119M budget