Homeowners and property owners in Palm Beach County have one more thing to worry about as inflation increases the cost of living: property taxes.
As property values go up, so will the taxes on those homes and buildings. That includes properties with a Florida homestead exemption, which is a tax break on homeowners' primary residence. According to the county's property appraiser, taxable property values have increased 13.55% from last year to now. County commissioners addressed the short and long-term effects of rising taxes and cost of living at a recent county-wide budget workshop.
Palm Beach County Mayor Robert Weinroth told WLRN that he and his colleagues are working on possible county-wide solutions, just in time for the upcoming budget meeting on July 12th.
Weinroth says at that meeting, commissioners and the county administrator, Verdenia Baker, will address whether they should reduce the millage rate and "set the maximum millage at that meeting, which means it can always go down from that number. "
"And it may not be significant," Weinroth said. "It may just be a 10th of a point or even less than that. But I think that it's going to serve as a signal to our residents that we are mindful of the financial pressures that they're under right now. And we can tighten our belts a little bit too."
Property tax on a homesteaded property can increase by a maximum of 3% and 10% for non-homesteaded properties, according to state law.
The county-wide tax rate is currently at 4.7815%. The library district and fire rescue, set their own rates.
This interview with Mayor Weinroth has been condensed and edited for clarity.
WLRN: You and County Commissioner Mark Bernard suggest lowering the county-wide millage rate, which is the local tax rate to determine property taxes for homes in the county, and that could help homeowners save some money. Why do you believe reducing the millage rate is the right approach?
WEINROTH: Well, I think it's several factors are playing together. The first [thing is] home values in Palm Beach County have gone up significantly over the last year. We're looking at numbers that approach 30 to 40% in some areas. Now, that is not going to be the kind of increase we would see as far as the revenues coming to the county because of Homestead and because of other factors that keep property taxes down. The property appraiser has reported to us that right now, we can anticipate between 13 and a half and 14% increase in the value of real estate in Palm Beach County over last year. So that means that if we keep the millage exactly where it was last year, every one of our taxpayers is going to see a significant increase because of the value of their property. And I'm looking to make that a little bit less onerous, especially with the other factors of inflation and gas prices, food prices, rent insurance, you name it, it's there.
WLRN: If the board lowers the millage rate to possibly keep people's taxes the same, what will that do to municipal budgets?
WEINROTH: What we need to do is make sure that we are adequately funding the services that our constituents, residents require. And that means safety. That means the services that our county staff is performing on a daily basis. And all of those services have gone up in cost as well as the cost of running a household. So salaries have gone up, supplies have gone up, everything has gone up. So we're going to have to, in of necessity, increase the amount of the budget for this year over last year. But what Mr. Bernard or Commissioner Bernard and I, however, are talking about, and really my colleagues, all seven of us, feel the same way that we want to see if there's some way that we can temper the increase.
WLRN: Isn't it usually seen as a good thing when property values increase in this case? Are we seeing families getting priced out of Palm Beach County?
WEINROTH: Well, it's too much of a good thing, unfortunately, because, like you said, we're finding that the ability to find affordable workforce housing in our county is diminishing. You can't have prices going up 30 and 40% without making a major impact on families that are trying to live in the county and work in the county.
WLRN: Mayor Weinroth, we've seen the new financial firms that have made Palm Beach County their new home now. And according to the New York Times, Manhattan transplants who've moved to the county during the early stages of the pandemic earned an average income of nearly $730,000. How has that influx of wealthy people affected the affordability of homes in Palm Beach County?
WEINROTH: Well, you've put your finger on it because we are getting a lot of transplants who are arriving with a fistful of cash. They are looking at these values compared to what they left behind in the northeast. They say it's a bargain. They look at our taxes down here and say, 'wow, this is much nicer than when I left behind.' And so they're in a much better position to be able to make offers on real estate, usually over asked and usually without any mortgage contingencies that they are ready to be a cash purchaser — comparing that to the people who live here. It makes them have an advantage.
