Palm Beach County’s unremitting growth and a relentless surge in property values are fueling a $457 million increase in local government tax collections for the upcoming year, data analyzed by Stet News shows.
The property tax, under fire from Gov. Ron DeSantis, is geared up to account for more than $6.5 billion in payments from Palm Beach County property owners in the coming budget year, which starts Oct. 1.
Local governments, including Palm Beach County, the Palm Beach County School District and the county’s cities, are poised this month to set final tax rates. The analysis is based on preliminary rates they submitted to the Palm Beach County Property Appraiser’s Office.
The state long ago established strict protocols for publishing tax rates, including calculation of a base at which the local government would raise the same amount of money as the previous year, called the rollback rate.
Anything above the rollback rate, under state law, is a tax increase.
In Palm Beach County, just two cities — Palm Springs and South Palm Beach — are proposing tax rates below the rollback rate. Two other cities — tiny Glen Ridge and Cloud Lake off Southern Boulevard near Palm Beach International Airport — have no property tax.
The other 35 municipalities and the county, school district and taxing bodies such as the Health Care District, the Children’s Services Council and the South Florida Water Management District, are all proposing tax increases even though in most cases the tax rate doesn’t change.
More than 1,000 million-dollar homes
The tax hikes are driven by the continued rise in property values, 8.18% countywide, and new construction, which for the second consecutive year added more than $5 billion to the county’s tax rolls, as Stet News reported in June.
The new construction figures are staggering.
Eighty percent of the new construction, $4.4 billion, is residential. A third of those 3,401 homes that came on the tax rolls on Jan. 1 are valued at more than $1 million.
The new construction propelled the county’s taxable value to $342 billion. That’s 63% higher than 2020.
In Palm Beach Gardens, where million-dollar homes are the norm in the 4,700-acre Avenir community on Northlake Boulevard, 571 new homes worth a combined $620 million went on the tax rolls, an average of more than $1 million per home.
Westlake, once a nearly 4,000-acre citrus grove west of Royal Palm Beach, had 557 new homes, none worth more than $1 million. Still, they brought $270 million in new value to the county’s newest city, $485,000 on average per home.
The tony island town of Palm Beach had just 15 new homes but they averaged $21 million each, producing $328 million in new value. That included the home owned by investment banker J. Christopher Flowers at 525 N. County Road, which topped the countywide list for highest taxable value among new residential construction at $121 million.
But new residential construction topping $1 million per unit wasn’t limited to Palm Beach Gardens and Palm Beach.
It happened in 20 cities, including Boca Raton ($7 million per home), Jupiter ($6.3 million), North Palm Beach ($3.1 million), West Palm Beach ($2.5 million), Tequesta ($1.9 million), Delray Beach ($1.8 million) and Riviera Beach ($1.2 million).
The highest average, however, came in Manalapan, where four homes added an average of $25.5 million each to the town’s taxable value.
About half of the new residential units weren’t in any city, but scattered throughout the county, adding $1.6 billion to the tax rolls, or $971,000 per home.
Property taxes in DeSantis’ crosshairs
Municipalities typically are wary of cutting tax rates during good times, fearing it will be hard to raise them when times are bad. But they face new pressure this year from Gov. Ron DeSantis, who has suggested eliminating property taxes and has created a team of state auditors who have been reviewing local spending under the Florida DOGE initiative.
The Republican Party of Florida has put out a website urging towns to go to “#RollbackNOW” to “provide immediate property tax relief to hardworking Floridians.”
DeSantis proposed eliminating property taxes, which raise $55 billion statewide and pay for local services such as police, fire, garbage pickup, parks and libraries.
“If you own your home and that’s like your primary residence and you have a homestead and everything like that I don’t see how government has the right to keep asking you to pony up infinitum to just pay rent to them to just live on the property that you supposedly own,” DeSantis said in June.
“For too long we’ve just allowed … massive expansion of local government budgets because property values rise and they just get all this money flowing in and that’s kind of turned into a gravy train.”
Lawmakers might find it difficult to replace the huge sums raised by property taxes but they could push for more state control to assure local governments rein in spending. They also could provide more exemptions to help property owners pay less, while shrinking the pot of money available to local governments.
The Florida Association of Counties has posted studies of the issue online, pointing out that costs are rising but most counties keep their tax rates steady.
“If the goal is to make Florida more affordable, the focus should be on what’s actually driving costs higher: rising insurance premiums — not the basic services that communities rely on every day,” the association wrote.
Local property taxes are efficient and deliver value by paying for “essential” services, such as police, firefighting and parks, the Florida League of Cities wrote.
“Eliminating property taxes won’t eliminate taxes, it will likely just shift the burden elsewhere, probably onto other taxes and fees,” the league said.
Tax hikes in Palm Beach County
In Palm Beach County, state officials will find most local governments are proposing a tax rate that is, on average, 7% above rollback.
That means those cities and towns will collect more money overall from property owners in the coming year. Homeowners with homestead protection will see the least increase because the rise in their property values is capped at 3 percent per year.
Instead, the increase hits rentals, owners of second homes and business properties the hardest. The increase is capped at 10 percent for non-homesteaded property.
Municipalities will vote on the tax rate twice at public hearings in September. They are blocked by state law from raising it beyond the number sent to property owners in their TRIM notice last month but they can still lower it.
The two towns considering a tax rate more than 20% above rollback are tiny Loxahatchee Groves (23.5%) and Lake Park (22%).
The county’s proposed tax rate, $4.50 per $1,000 of taxable value, is the same as last year, but 6% above rollback.
The school district’s two rates, a combined $6.32, are about 4% over rollback.
The county and school district are in line to raise $242 million more in the coming year than last year. They are banking on generating nearly $4 billion to pay for operations.
For the county, the $1.5 billion in collections doesn’t count special property taxes to pay for fire-rescue and libraries in select areas. Those taxes are expected to collect another $612 million, pushing the county’s take past $2 billion.
Cities that would see the greatest increase over the previous year are West Palm Beach ($17.8 million increase), Delray Beach ($14.3 million), Boca Raton ($9.9 million), Palm Beach Gardens ($9.6 million), Palm Beach ($6.6 million), Riviera Beach ($5.9 million), Boynton Beach ($5.1 million), Jupiter ($2.9 million), Wellington ($2.2 million) and North Palm Beach ($1.7 million).
Delray Beach went to rollback last year dropping its tax rate to $5.90. This year, rollback would be $5.60 but the city is proposing a tax rate of $6.16. That would bring tax collections to $121 million or 13.4% more than last year.
Westgate, with its rapid growth, is looking to raise 27% more from property taxes in the coming year. Its $4.70 proposed tax rate is 8.6% above rollback and would generate $7.6 million.
The increased property tax revenue for most cities falls between 6% and 10%.
In an examination of the issue, the Tax Foundation, a Libertarian-leaning think tank, concluded that property taxes may be the most efficient approach.
“While voters’ frustration with rising property tax bills is real and warranted, it’s important to remember that property taxes are economically efficient, transparent, and locally accountable,” the foundation’s Joseph Johns wrote. “Shifting billions in existing tax revenue to localities from the state government through a temporary rebate or permanent exemptions is economically unsound.”
This story was originally published by Stet News Palm Beach, a WLRN News partner.
