TAX NEWS - 2010

Miami-Dade mayor's proposed budget: less for payroll

Miami-Dade Mayor Carlos Alvarez is proposing a budget that prioritizes crucial services like police and fire and cuts administrative costs. Whether individual tax bills rise depends on homestead status, where and when you bought

Miami-Dade Mayor Carlos Alvarez's proposed budget for 2010-11 calls for:

Preserving direct services of police, firemen, fire-rescue and social services for the elderly and children.

Raising the tax millage rate to essentially a ``rollback'' rate that generates $55 million less in property tax revenue than this year's budget.

Eliminating 1,199 county positions, including 900 filled posts that would entail actual layoffs in a host of areas including IT, human resources, finance, parks and libraries. That would cut county employment to 27,414 positions, the lowest level since the mid-1990s.

Reducing maintenance of county roads and buildings. Cutting park maintenance, cultural spending, community outreach and beautification programs.

Increasing retail customers' water and sewer fees by 5 percent, or about $24 a year on average.

Miami-Dade Mayor Carlos Alvarez, confronting the toughest financial challenge of his administration, proposed a 2010-11 budget Wednesday that would hold property tax revenues flat by adopting essentially a so-called rollback rate.

The mayor's proposed budget calls for no layoffs of police, firefighters or paramedics. Some taxpayers would pay more, some less.

Yet the county payroll would drop to its lowest staffing level in more than a decade. Social services would be trimmed, Alvarez said, with a priority on preserving direct services for seniors and children. Also to be reduced: maintenance of county roads and buildings, along with funds for park maintenance and staffing, cultural spending, community outreach and beautification programs.

The mayor's budget balance -- straddling a line of keeping crucial services intact while not hitting taxpayers with a huge new bill -- will be played out in governments across the region, as cities and towns grapple with dwindling property values and escalating needs.

"What I don't want to see is the quality of life of our residents drop at the same rate as their property values," Alvarez told commissioners in a memo Wednesday.

The mayor proposed to cut 1,199 county job positions, including about 900 actual layoffs. That would pare county employment to 27,414 positions, the lowest level since the mid-1990s. That is harsher than last year, when county layoffs were minimized by eliminating open positions and shuffling staffers to different departments through a complex bumping system.

"We really tried to preserve critical, direct services," Alvarez said in an interview. "The internal support functions and administration or overhead is what's really getting hit hard."

The county is facing a revenue shortfall of more than $400 million, driven in part by a lack of new construction coming online to bolster the property tax rolls. Only $2.63 billion in new construction went up as of Jan. 1, compared with $8.28 billion a year earlier.

Last week, Miami-Dade Property Appraiser Pedro Garcia said county property values declined 13.4 percent to $192.48 billion this year from $222.14 billion in 2009.

Alvarez -- whose term as mayor ends in 2012 -- wants to raise the tax millage rate enough to offset the steep decline in property values in order to come up with a so-called rollback rate, which generates nearly the same amount of revenue as the prior year.

The tax rate is the number that is multiplied by each $1,000 of taxable value of real estate in order to calculate property taxes.

How individual taxpayers are affected will vary depending on their circumstances.

A higher tax rate would mean that Miami-Dade property owners with long-time homesteads on their homes would end up paying higher taxes even though their properties values plummeted.

Such longtime homesteaded properties that have large amounts shielded from taxation under the Save Our Homes provision would see taxable values climb 2.7 percent, which multiplied by a higher millage rate would result in a bigger tax bill.

But others, including recent buyers, commercial property owners, those with non-homesteaded residences and those living in areas that have seen steep declines would see lower tax bills -- despite a higher tax rate.

The mayor's total proposed budget for FY 2010-11 is $7.34 billion, including $4.72 billion in the operating budget and $2.63 billion in funding for capital projects.

That is 6.3 percent less than the 2009-2010 adopted budget -- with the operating budget dipping 1 percent from this year and the capital budget dropping 14 percent, according to Alvarez's report.

The mayor's proposed budget will serve as a baseline for debate by the county commission, which will hold two public hearings Sept. 13 and 23 before voting to adopt a budget for the new fiscal year beginning Oct. 1.

With Miami-Dade county still mired in a real estate crisis and reeling from high unemployment, some commissioners may find it unpalatable to raise the tax rate.

Under the mayor's proposed budget, the county would collect $55 million less in property taxes than it did in the 2009-10 fiscal year and $236 million less than the 2008-09 year.

Miami-Dade Commissioner Rebeca Sosa said Wednesday she wasporing through the mayor's proposed budget books.

"He's proposing a no-tax increase budget -- a rollback budget. But the reality is we need to study that closely, because many people are going to pay more taxes, especially people living in a homesteaded property for many years,'' Sosa said. ``Those non-homesteaded owners will see substantial savings, dependingon what market they're in."