City commission members unanimously approved the $711.4 million budget, which goes into effect on Oct. 1, the same day employees will get a 5% cost-of-living pay raise and salary adjustments that could be as high as 15%.
The size of those salary adjustments will depend on how far that employee's pay is below the top of the salary range for his or her position.
It's the second consecutive year West Palm Beach has both reduced its property tax or "millage" rate and raised the pay of its employees.
Tax rate decrease for homeowners, 'historic raises' for employees
"Passing a balanced budget is an important milestone, and we were able to reduce the millage rate for the second consecutive year while giving our employees historic raises," Mayor Keith James said. "It’s a significant achievement that helps ensure the long-term sustainability and success of the city of West Palm Beach.”
Like other governments in Palm Beach County, West Palm Beach has struggled in recent years to recruit and retain employees, many of whom have a hard time affording the area's soaring housing costs.
City officials negotiated the new employee pay structure with their unions, the Service Employees International Union and the Professional Managers and Supervisors Association. The raises are expected to cost about $5.9 million in fiscal year 2024, but city officials said the new pay structure is a necessary step in rewarding and retaining employees.
"We're talking about the best use of our funds, the priorities of the strategic plan, and none of that can be accomplished without staff and retention of good staff," Commissioner Christina Lambert said. "I'm very excited that that's a big piece of this budget."
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Despite rate reduction, West Palm Beach homeowners will see higher taxes
Another piece of the budget is a property tax rate reduction.
The budget includes a rate reduction of 0.8%, which cost the city about $1 million.
Because of increasing property values, West Palm Beach homeowners will still see slightly higher property tax bills.
This year, the owner of a $400,000 home with homestead exemptions had a bill from the city of $2,897.
Next year, that homeowner will have a bill of about $2,969, factoring in the lower property tax rate and a 3% boost in property value, the maximum allowed by law for those with homestead exemptions.
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That's a difference of $72, the cost of about a tank and a half gas for a mid-sized SUV. If the city had not reduced the property tax rate, the homeowner above would have had a property tax bill that rose by about $100, instead of $72.
Low income West Palm Beach homeowners who are at least 65 years old can apply for an additional homestead exemption that would lop off another $25,000 in taxable property value. Senior homeowners who get the additional exemption would have a property tax bill of about $2,764.
Construction growth and the rise in property values continue to fuel an economic boom in West Palm Beach, which city officials have begun to market nationally.
Taxable property value was $21.1 billion in West Palm Beach, an increase of $2.8 billion from the year before. New construction added about $284 million to the city's tax roll.
Money for police, fire, parks and rec and public works increase
Police and fire are the largest line items in the city's budget, with police services coming in at $84 million and fire coming in at $49.2 million. The amount budgeted for those services is up 9.3% and 3.9%, respectively.
About $23.2 million has been set aside for parks and recreation, an increase of 14%. And the city expects to spend about $20.1 million on public works, an increase of 9.9%.
City Administrator Faye Johnson praised her staff for their work in putting the budget together.
"We try to be very judicious in terms of reviewing all of the (department) budgets that come into the budget process and make it certain that we've looked at everything with a fine tooth comb, that we feel confident that we are making the very best use of taxpayers' dollars and to also make certain that the requests align with the priorities that the commission and the mayor have set," she said.
Wayne Washington is a journalist covering West Palm Beach, Riviera Beach and race relations at The Palm Beach Post. You can reach him at firstname.lastname@example.org. Help support our work; subscribe today.
This article originally appeared on Palm Beach Post: West Palm Beach approves budget that cuts taxes, raises employee pay