Property Tax Cuts Could Cause Layoffs in Palm Beach County

Faced with the prospect of property tax cuts barreling down from the Legislature, Palm Beach County and its cities are bracing for a wallop that could cost them, under the state’s harshest plan, more than $367 million.

Although passage appears unlikely in its current form, a plan backed by House Republicans has local officials predicting doomsday, warning that cutbacks could force them to dramatically scale back services, abolish entire departments or implement layoffs.

“I have not seen anything like this before,” said Anne Costello, finance director for Lake Worth, who told state representatives in an April 3 letter that if the property tax plan were approved, her city’s library and recreation services would be eliminated and there would be layoffs of “monumental proportions.”

The plan by House Republicans, one of several being floated, takes direct aim at the tax jackpot local governments reaped during the hot Florida real estate market. Backers of the plan say that it would bring much needed property tax relief for homeowners statewide, as well as put a plug in the cornucopia of local government spending that took place during the five-year boom.

The bill’s future, though, is uncertain. The Senate, which has its own plan, is in opposition to part of the proposal that would allow voters to eliminate real estate taxes in favor of a higher sales tax. Nevertheless, local officials say that the message from Tallahassee is clear: The days of giant property tax increases and ballooning budgets are over for now.

“I don’t have a crystal ball, but I’m pretty confident that all levels of government are going to be forced to diet somewhat,” said Jamie Titcomb, executive director of the Palm Beach County League of Cities. “They’re going to have to go on some sort of reduction plan.”

And local officials say the preparation for steep decreases has begun within the Florida home mortgage market.

In West Palm Beach, which would lose $27.9 million in property tax money under the plan, Mayor Lois Frankel said departments are creating budgets with different levels of spending. In Delray Beach, which would surrender $15.6 million of its property tax money, city officials said that most of the departments are submitting budget proposals that are 85 percent of their current funding.

“We’re going to have to lay people off, there’s no question about it,” Delray Beach City Manager David Harden said.

In light of the Legislature’s agenda, Wellington Village Manager Charles Lynn has proposed slashing $6.3 million from this year’s budget, including a hiring freeze on most open positions and delaying $5.5 million in capital improvement projects. In Lake Worth, which could lose 39 percent of its Florida property tax revenue, Costello warned state legislators that layoffs could seep into the city’s public safety offices, such as police and fire.

“When you talk about libraries and parks, you still want to produce a level of services, but maybe they’re reduced to open only a certain time or day of the week,” said Boca Raton City Manager Leif Ahnell, who could see $16.8 million of the city’s property tax money disappear. “You may be in a situation where you eliminate services all together.”

State politicians say local officials went on a spending spree in recent years, taking advantage of a boom driven by skyrocketing property values in Florida.

Landlords, part-time residents, business owners and others have stormed legislative hearings seething about the increases. When the bill advanced toward a full House vote last month, Miami housing market Republican David Rivera said the bill aims at local governments’ “overspending, gluttony, avarice, excess, maybe greed.”

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