More Millage Rate Mumbo Jumbo (Language or Ritualistic Activity Intended to Confuse)

This year we again heard more of the annual millage rate talk (alternatively, you may describe it as gibberish, double talk, gobbledygook, jabberwocky) in the annual budget hearing of the City of Coral Gables.  Depending on the direction–up or down–of spending and property values, the Director of Finance always, and I emphasize always, comments on the millage rate as “much lower than many other full-service cities”, “our rate is going done” or  “our rate is just 27 percent of your total taxes,” as if he was saying something substantive.

Why so much talk about the millage rate.

The millage rate is simply the result of dividing the assessed property values by the city budget–nothing more and nothing less.

How do you calculate the millage rate:  (1)  you decide how much money you need in the budget–this is a management and commission decision and it is the only relevant decision;  (2) you divide the amount you need (say, $78 million) by the total assessed property values (say $13 billion) to get the city’s share; and, voila, (3) you get the millage rate (adjust it to a rate per thousand dollars).  Therefore, the millage rate (the tax rate) is determined by the city budget request alone–everything else is out of the control of Coral Gables.

The City of Coral Gables Commissioners and Managers never discuss the budget in great detail during the Budget Hearings.  The commissioners’ questions, directed at management, are usually quite restrained.  There has been no real deep questioning about the number of employees and benefits, present or future capital spending, maintenance costs, vehicle costs, overtime, etc. and different ways of reducing spending and taxes significantly.  The taxpayers is not well represented in the process.

I quote from my last year’s post.

The city fathers do us no favor by having a lower or higher millage rate.  They do us a favor by better managing the city’s budget–that is [what] counts.

About Stephen E. McGaughey
International consultant in economic development programs and projects

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