The Flagler Beach City Commission this evening approved a tentative property tax rate of $4.2311 per $1,000 in taxable value. In an indication of shocks to come for other municipalities and the county, it’s a considerable increase — 22 percent — from the current $3.4643 per $1,000 rate. But before scheduling your apoplexy, a few explanatory details should dull the shock a little.
The tax rate alone doesn’t decide how much you’ll pay. The tax rate in combination with the taxable value of your property does. The tax rate is going up, but only to compensate for collapsing property values. The end result should be a rough wash.
If you own a home in Flagler Beach valued at $150,000, and it has a $50,000 homestead exemption, you paid $346.43 in municipal property taxes this year. (That doesn’t include school, county and other taxes.) If the new rate kicks in as proposed, you’d pay $423.11 next year, a $76.68 increase. But that’s only if the value of your home would have remained steady. If it has, your home is a phenomenal exception, and you should be ecstatic to pay that extra $76.68, because you’re better off than you know–and better off than the virtual totality of property owners in Flagler Beach or the rest of the county. In fact, taxable values plummeted 20 percent this year compared with last in the county at large. In Flagler Beach, taxable values dropped 23 percent.
So in reality, if you own that home valued at $150,000 last year, it’s likely valued at quite a bit less this year. The tax rate will be higher. What you will end up paying most likely won’t be much more than you paid last year, and may even be less, depending how much value your property lost.
That’s what enables city officials to say that Flagler Beach is not increasing taxes except fractionally, because the city is merely proposing to stay close to the so-called “rolled-back rate”–the tax rate that would bring in almost the same amount of tax revenue this coming year as it did the last. “Technically and legally the state recognizes that as no tax increase,” Flagler Beach City Manager Bernie Murphy said.
City commissioners agreed unanimously to actually set the proposed rate at a fraction higher than actual rollback ($4.2311 per $1,000 instead of $4.2023), but only to have some room to maneuver in the weeks ahead. They may decrease the rate, back to the actual rollback rate, by the time they adopt a final number in August. (They did so last year, after setting their initial tax rate slightly higher.) What they may not do beyond today’s vote is set an even higher rate than the one they picked on Thursday. The commission will hold two public hearings, on Sept. 8 and Sept. 22, before voting on the final rate.
Flagler Beach is the first government agency in the county adopt a proposed tax rate for next year. Other cities and the county will follow in the weeks ahead. They’re each likely to do what Flagler Beach did: raise their tax rates considerably, at least to keep revenue at the same level it was in the previous budget year, but the rates won’t go up much beyond that “rollback” threshold.
That said, what applies to the state’s and the city’s definitions may not necessarily apply to individual property owners, who, depending on whether they are homesteaded or not, or whether they bought a house last year as opposed to ten years ago, or whether they’re paying property taxes on a commercial or rental property (which carry a disproportionate share of the tax burden), may experience big variations in how much more or less they’ll end up paying. Only the end result looks relatively “neutral” for the city–that is, it wouldn’t bring in much more than the $2.27 million property taxes brought in last year.
A few highlights of the proposed budget:
- Assessed values decreased $140 million in Flagler Beach.
- Employee health care costs are increasing by $94,000, though the administration is still working with Florida Health Care to bring down the cost.
- Legal costs increased $59,000.
- Pier operations increased $32,000.
- The city would have to use $50,000 of its $3.4 million reserves to balance the budget.
Commissioners didn’t debate the proposal much, beyond an attempt by Ron Vath to immediately go to the rolled back rate. He was convinced by other commissioners to leave a little room for adjustments. The difference would have been a matter of $15,000.