West Palm Beach officials are looking to raise the city’s fire tax from $25 a year per resident to as high as $85, three years after commissioners swore against a similar hike.
The fire assessment was first levied in 2008 as a way to fund the construction and rehab of fire stations across the city. But when former Mayor Lois Frankel in 2010 suggested raising it to $100, and then $65, to help close a budget gap, commissioners and residents rallied against it.
In 2010, Commissioner Kimberly Mitchell said that the money should only be used to pay for construction of fire stations. Not only was she against raising it, but she said she wanted to end “that pesky $25 fee” altogether.
However, at Monday’s commission workshop, Mitchell said she will now go along with the fire tax hike as long as the city looks to cut elsewhere. She would not say what the city should cut.
If the city were to raise the fee to $85, it would fill $4 million of the city’s estimated $8.2 million shortfall that officials have been blaming on rising pension costs.
“I think this is something we should definitely consider, but I’d only consider and support it if we are at the same time re-shifting our thinking,” Mitchell said.
City finance director Jeff Green said he looked at other cities’ fire taxes and he said they ranged from a low of $80 in Boca Raton to a high of $189 in Hollywood. Ft. Lauderdale is looking to raise its fire tax to more than $200.
City Administrator Ed Mitchell also defended the hike, saying it’s in line with other cities. “Boca is $80, Boynton Beach is $88 and we have an $8 million plus gap,” he said.
Commissioners won’t have to set the rate until the fall, but Green wanted permission from commissioners to set it as high as $85, so homeowners could be alerted. The first public hearing will take place in July 8.
The fire tax was one of the hottest topics in the city in 2010, when an overflow crowd poured into city hall for a hearing and broke out in applause when Frankel surprised commissioners and residents by deciding to keep the fee at $25.
On Monday, Commissioner Shanon Materio noted that West Palm Beach’s commercial fire tax rate, which is based on the size of a business, is cheaper than Lake Worth’s rate. Materio owns a business in Lake Worth.
But Materio said she was concerned with what an increase would do to elderly residents on fixed incomes.
Kimberly Mitchell also said it was “unfair” for low-income residents.
On Thursday, Mitchell defended her changing position on the fire tax over the last three years, saying the economy has changed. In 2010, she said, “property values were declining at a very rapid rate.”
Mitchell blamed police and fire pensions, as well as rising health care costs, for the city’s $8 million shortfall. The shortfall comes despite the city predicting its first increase in taxable property values in five years.
Mayor Jeri Muoio said the city needs to find a way to lure more businesses, to expand its tax base. Otherwise, she said, “we’re just going to have to cut and cut and cut.”