More on the Coral Gables Budget: Property Taxes as an ATM Machine
August 13, 2010 Leave a comment
It is interesting to look at the historical budget and tax revenue data supplied by the city in the latest Estimated Budget, 2010-2011.
- City property tax revenues rose from $29.5 million in 2000 to $66.4 million in 2009. Let’s say that these property taxes had risen just by the inflation rate from 2000 to 2009. How much would it have increased? It would have increased from $29.5 million to $36.8 million in 2009, not $66.4 million. In other words, property tax revenues have increased by more than 80% above the inflation rate.
- Assessed values increased from $5.5 billion in 2000 to $13.0 billion in 2009. The equivalent inflation rate would have seen values increasing from $5.5 billion to $6.85 billion. Thus assessed values increased by 90% more than the inflation rate level. That was the abnormal real estate value.
- We can conclude that Coral Gables increased taxes as fast assessed values increased.
- Like many families in Coral Gables, the city used its property taxes as an ATM machine–spending as fast as the money came in thinking that assessed values would keep rising. Unfortunately, even today the city keeps increasing taxes as if property values were increasing just like the good old days instead of adjusting to the economic realities that may continue for years.