Tax rate reduction, surplus revenue plans make sense
In a repeat of last year’s action, the Palm Beach City Council decided that with rapidly rising home values giving the city’s coffers a boost, it makes sense to reduce property tax rates.
During the second of two public budget hearings required by the state Thursday at City Hall, council members voted unanimously to pass a mileage rate of $2.69 per $1,000 of value taxable, a 7% reduction from the current rate of $2.89 per $1,000.
Even with the reduction, the increase in property values means the new tax rate will generate an additional $2.5 million in tax revenue, for a total of $65.4 million.
Last year, similar additional revenue was used to help pay for the reconstruction of the North Fire Station as well as tax breaks and cost-of-living adjustments. This year’s surplus is also earmarked for projects that will benefit the community.
The council agreed to use the extra revenue for public safety improvements such as the installation of ‘smart’ traffic lights, designed to reduce the time cars spend idling. Given the growing concerns over traffic, especially during the season, this is certainly money well spent.
The board also passed Thursday an operating budget of $97.2 million for the next fiscal year, which begins Oct. 1. The 9% increase over the current budget of $89.1 million will primarily go to 9.6 new full-time public safety employees; salary, contractual and inflationary increases; additional money transfers to the coastal protection fund; and improving public safety capital assets.
Earlier this year, the return of the Palm Beach Popular Annual Financial Report showed that for the fourth consecutive year, the city ended its fiscal year with a budget surplus of $2.3 million for the fiscal year that ended September 30, 2021.
The city is fortunate to have received a share of budget windfalls, and it’s encouraging that leaders are making sure to spend that surplus on things that will improve residents’ quality of life.
However, the future is uncertain – and with issues such as deciding how to source drinking water, there could be significant expenses at the tap. So while we applaud the board’s work to date, we encourage leaders to continue to pay attention to building reserves.