It’s a matter of the “haves and have-nots” when comparing the proposed fiscal 2018/2019 budgets of neighboring cities Indian Harbour Beach, where no tax increase is planned, and Satellite Beach, which is proposing an 8.2 percent property tax increase – largest in six years.
What Indian Harbour Beach has is more than $7 million in reserves due to frugality, less population (8,381 compared to Satellite Beach’s 10,832) and fewer city services. Subsequently, Indian Harbour Beach remains in good financial shape although it faces major expenditures like a new police station and canal muck dredging costs.
The increase in Indian Harbour Beach property values (7.72 percent) enabled the budget to be balanced with no change to the millage rate from the current tax rate of $5.64 per $1,000 of taxable property value. The resulting $350,000 helped Indian Harbour Beach hold the line on taxes, even with an expected $250,000 loss in revenues as Amendment 1 is expected to pass and increase Florida’s Homestead Exemption by $25,000 for homes with an assessed value greater than $100,000.
Satellite Beach, which has more city services, is faced with a $600,000 homestead revenue decrease along with the challenge of addressing several significant financial pressures. The city has to compensate for being impacted by two hurricanes within the same fiscal year with delays in FEMA reimbursements, and must address pressing stormwater and other infrastructure maintenance and replacement needs.
The proposed Satellite Beach millage rate is $8.82 per $1,000 of taxable property value, 8.2 percent higher than the previous year and 16.12 percent higher than the roll-back rate of $7.59 per $1,000 of taxable value. Over the past six years, the city has either dropped the millage rate or kept the rate the same as the prior year.
“Raising taxes was not something that we wanted to do, but … it became clear to both City Council and staff that increasing the millage rate is the responsible thing to do to support the city’s financial future,” said assistant City Manager Suzanne Sherman.
For the upcoming fiscal year, the city has established a new operating line item with a budget of $100,000. If this money is not needed for hurricane response, it will be added to reserves each year.
It’s a start, but the cost to the city for its response to the recent hurricanes has averaged between $300,000 and $500,000 per storm.
“Without a millage rate increase to begin rebuilding reserves, and with the anticipated passage of the additional homestead exemption, the city would be limited in its ability to respond to a significant storm event, and sufficient funding for infrastructure maintenance and replacement needs would be restricted as well,” she said.