West Palm Beach holds tax rate steady but more cuts next year possible


Commissioners Thursday set a tax rate unchanged from last year, with Mayor Jeri Muoio saying the city, with the economy rebounding, needs to start putting money back into reserves it dipped into the last two years.

But Finance Director Jeff Green warned that, unless the city finds more cuts or gets a lot more income over the next year, it will start its 2014-2015 budget year $5 million “in the hole” and will have to do just that: go back to reserves.

“Our mission over the next year is to keep that from happening,” he said.

At the first of two budget hearings, commissioners voted 5-0 to tentatively adopt the city’s $172 million general fund budget and tentatively set the rate at $8.54 per $1,000 of a home’s taxable value. The second hearing, with a final vote on the rate and budget, is set for Sept. 25, at 5 p.m.

Facing a budget gap of as much as $8.5 million, the commission voted in July to retain the option of raising the tax rate from to as much as $9.55. And Green had proposed tripling the city’s fire assessment fee, including increasing the residential fee from $25 to $85.

But city staff cut the gap to $2.5 million and Muoio proposed leaving the tax rate and fire fee unchanged and instead dipping into reserves for the second straight year to finish balancing the budget. Commissioners agreed, voting Sept. 3 to leave the fire fee alone.

“We are at a critical crossroads,” Muoio said at Thursday’s budget hearing.

“The kinds of cuts we’ve had to make to close that gap won’t be available in the years to come,” she said. “We really need to focus on putting money back in that reserve.”

The city’s revenues have dropped 13 percent since 2006, Green said. He has said many new developments and sales of property would eventually account for an added $1.3 billion in property value and generate as much as $10 million in new taxes. But he warned it could take as long as a decade for the city to get back to its high water mark for property value totals.

Commissioner Kimberly Mitchell said she believes the city has placed too much in reserves.

“It actually makes sense to put that money back to work in the neighborhoods,” she said.

Mitchell also said the city needs to keep looking for cuts, especially through privatizing. She drew laughs when she pointed to herself and her colleagues and quipped, “the only thing you can’t outsource is us.”



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