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.

Filed under Budget, Coral Gables, Finance, Property Values, Taxes and Fees

Future US Economic Policy Could Hurt Coral Gables

August 13, 2010 Leave a comment

There is a lot of talk about resolving the fiscal crisis in the US by having higher taxes (letting the Bush tax cut expire for the wealthy) and slowing the growth and reducing spending on social security, medicare and medicare.

This will hurt Coral Gables in several ways.

  • Reduced spending will hit the State of Florida’s budget and cut transfers to local government and  education spending (putting more pressure on property taxes);
  • Reduced spending will not be helpful in getting the economy back on track and this will hit consumer spending;
  • There will be less money available to carry out needed infrastructure investments locally;
  • Unemployment will continue to have bad effects since there is pressure to cut compensation for people who are unemployed for long time periods;
  • Retail sales and spending will remain sluggish;
  • It very hard to imagine that there will be a willingness to set up national disaster insurance and relief; and
  • There will be no relief in sight to help cover the costs of excessive local salaries and pensions.

This gives greater urgency to keep property taxes and fees down,  and to do something about salaries and pensions in Coral Gables and build up local reserves.

Filed under Coral Gables, Economy, Finance

Recovery Around the Corner: So Thinks the City of Coral Gables?

August 12, 2010 Leave a comment

It would appear that the city manager and commissioners of the city of Coral Gables believe that in the not-too-distant future the economy will return to a better time.  That seems to be behind their unwillingness to make significant reductions in the city’s operating costs.  They are cutting capital investments–another sign that the economy will come back soon.

And–

  • We are still waiting for the city to play hardball with the police, firefighter and staff unions;
  • We are still waiting for a reduction in force of overstaffed and overpaid public security;
  • We are still waiting for the reorganization and consolidation of overstaffed and overpaid departments;
  • We are still waiting for a reduction in salaries of senior staff, including the city manager and the city commissioners;
  • We are still waiting for a cut back in the number of middle managers;
  • We are still waiting for the city to get tough with the Biltmore Hotel management;
  • We are still waiting to put a freeze on property taxes while the economy is stagnant;
  • We are still waiting for a recognition that taxpayers are paying “real money” in taxes to Coral Gables;
  • We are still waiting for information on the cost of the museum; and
  • In short, we are still waiting for a new culture of “open government” in the city of Coral Gables.

Filed under Coral Gables

More Bad Economic Signs for South Florida

August 12, 2010 Leave a comment

For signs that the local economy will remain stagnant.  Also, you may have seen reports that China has slowed its imports–this hurts Latin American, Miami and commodity prices, as well as the US exporters. Not good signs for Coral Gables and not a good time to raise property taxes.

…for the past 10 weeks, the number of homes for sale — crucial in the supply-demand seesaw that determines real estate prices — has been inching upward, sparking questions about the state of the housing recovery and the effect of foreclosures on the marketplace.

The 4.6 percent increase of homes for sale in South Florida since May 31 represents the first two-month rise since the housing bubble burst, recently released data…

via Housing supply on the rise in South Florida – Real Estate News – MiamiHerald.com.

Filed under Business and Commerce, Coral Gables, Economy, Property Values, Taxes and Fees

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