No property tax increase for homesteaded residents as Palm Beach council sets tax initial rate

Homesteaded residents of Palm Beach will see no property tax increase from the town for the coming fiscal year under the initial tax rate unanimously approved Thursday by the Town Council.

Under the initially approved millage rate of $2.61 per $1,000 of taxable value, non-homesteaded property owners would see an increase on their tax bills of $179 per million of property value, said Bob Miracle, deputy town manager of finance and administration.

In Miracle’s first budget year with the town, his team proposed a tax rate and assembled a $104.8 million budget that council members praised as “well put-together.”

“What I like about this budget is that it does focus a little bit more than previously on these people concerns,” Councilman Lew Crampton said, pointing to increases in the proposed budget for police presence, code officers, and parking and traffic enforcement.

Lower tax rate, but more revenue

The initial tax rate set by the council Thursday is lower than the current fiscal year’s millage rate of $2.69 per $1,000 of taxable value. Still, the town will see an increase in property tax revenue with a taxable value of $29.08 billion for the coming year, up about $3.5 billion from this fiscal year.

More: Property appraiser estimates Palm Beach's overall values rose 21% over last year

This will be the sixth year in a row that the town’s tax rate does not amount to an increase in property taxes from Palm Beach on homesteaded owners’ tax bills, Town Manager Kirk Blouin said.

The $104.8 million budget is nearly $8 million more than the current fiscal year’s $97.1 million budget, records show.

Inflation an issue

Citing South Florida as “a hot spot for inflation,” Blouin told the council there are significant cost of living increases for town staff planned for the coming year’s budget.

In South Florida, inflation averages about 9%, he said, noting that the rest of the country is averaging about 4% inflation. “We’ve been experiencing a significant increase, much higher than the 9%, in our construction costs,” he said.

“Inflation is making an impact on the budget itself,” Miracle added.

What’s included?

An $11.2 million chunk of the coming year’s budget is dedicated to a major capital improvement project to renovate the town’s historic North Fire Station, town records show. The council Tuesday approved a nearly $15 million contract for the project, which includes a total overhaul of the 1927 landmarked structure.

The fire station project was “a large hit to our budget,” Blouin said.

More: Despite cost concerns, Palm Beach approves $14.8 million contract for fire station redo

“It was an unexpected and unfunded expense,” he said. “We were not anticipating rehabbing the North Fire Station, but it had mold issues and unfortunately major structural issues.”

Councilman Ted Cooney said the project was “the elephant in the room” for Thursday’s budget discussion.

The work had been projected to take place in a few years, but had to be moved up because of the building’s condition, he said.

From the general fund, the budget proposed nearly $8 million more in spending, including $2 million for cost of living increases for town staff; $1.2 million more for benefits; $1.2 million more for the retirement fund; nearly $2 million more for contracted services includes sewage treatment and information technology; and a $1.5 million transfer to the town’s capital and coastal funds, records show.

The council discussed including a $1 million contribution to the Phipps Ocean Park redesign and update project on the town’s South End.

More: With costs rising for Phipps Ocean Park redevelopment, additional money support sought

Councilwoman Julie Araskog said that with the increase in personnel costs and a budget of more than $100 million, “I just don’t think this is the year” for a contribution to that project.

Council President Maggie Zeidman suggested a $1 million contribution for the coming fiscal year, and another $1 million for the year following that. The discussion will be added to the council’s August agenda for further discussion, she said.

What’s next?

The council plans to pull a few items, including funding for Phipps Ocean Park, from the proposed budget for further discussion ahead of a pair of public hearings to finalize the budget. Those are scheduled for 5:01 p.m. Sept. 12 and 5:01 p.m. Sept. 21.

Once approved, the budget takes effect Oct. 1.

This article originally appeared on Palm Beach Daily News: No property tax increase for homesteaded residents as Palm Beach council sets tax initial rate