City Commissioners Use Fuzzy Math to Raise Taxes

 

Fuzzy-Math

City Commissioners are raising your taxes and telling you it’s not really a tax increase

 

Howard Melamed

Howard Melamed

By Howard Melamed:

At the Special City Commission Meeting , the city of Coral Springs commissioners are proposing a tax increase of 5 percent to all homeowners, while at the same time saying it really is not an increase. Their claim is that property values have increased and therefore as a result of this good fortune, they are getting more money and have found a way to spend exactly all of it.

This is the same city commission that has voted to increase commissioner salaries 64 percent, which will be on the Nov 4 ballot.

The facts are as follows :

1. They have a surplus this year of more than $1,000,000. They said that there is no reason to give this money back to the voters or reduce the budget or taxes by 1 percent “since a million dollars is not really a lot of money.”

2.When they did their new budgeting they increased it from the old budget and did not take into consideration that they over-budgeted for two years in a row.

3. The city takes in less money from commercial properties since they are going down in value and more money from residential properties. It is supposed to be the other way around.

4. The city needs the increase in revenues so they do not have to go before the voters to approve the new city hall $28,000,000.

5. The city commissioners could have made sure that we did not pay more taxes if they would have reduced the millage rate (the rate we pay taxes) by the same amount as the increase. So in fact, they are in control of the tax increase, since by doing nothing, we are paying more taxes.

It is also quite amazing how the commission is going out of their way trying to tell you differently. They all say that the increase in taxes that you are going to be paying is really not an increase. They state emphatically the State of Florida requires them to call it an increase since our tax bill will be more next year than this year. I am not sure if you are understanding this, but even though you are paying more taxes next year they want you to believe that you really are not, even though you are. Get it?

One of the commissioners claims that he is no math major.

Well, I am.

When your taxes increase, it is an increase in taxes. When you spend less money then you take in, that is a surplus.”

It is incredible that the commissioners think differently. They encourage you to call them up on their cell phones so that they can put you straight on this and dispel those people ( they mean me) that are feeding you the truth ( I used the truth, they claim it is something else). They will try to convince you that they actually know more than you and while they are taking money out of your pocket, they are telling you it really is not their hand doing it. So I encourage you to do exactly as they said. Call them up and ask them the simple questions regarding the non-increase increase such as … “Am I going to pay more taxes next year?” . Expect them to to answer ” Yes” . Then ask ” Ain’t that a tax increase ” They will say ‘No’. It is like an Abbott and Costello routine.

Blame Property Value Increases

The reason they are getting more money to spend is that your property value has increased. They say that the windfall in tax money ‘fell on their laps’ and they had nothing to do with it. Really? They could have rolled back the rates …a little to compensate so you would not have a tax increase. Ask them why they did not do that and they will tell you that we pay the lowest rate per value than anyone else in Broward County. We do not live anywhere else in Broward County. We live here in Coral Springs so whats wrong with having lower taxes?

The only time property value increase is a good thing is when you are selling your home (moving somewhere else where taxes are lower no doubt) or when you are refinancing. Higher property values for property owners translate in HIGHER TAXES!  To our citizens who live here and are not thinking of moving or selling, this hurts them since they are paying the government more money….in taxes.

Of course property value increases are great to see, but there is no reason for government to take more money from us as a result of our good fortune. Remember, as we have seen in the past, what goes up in value can come crashing down. So when you spend more money just because property values increase, there is a lot of pain when there is less money to spend. That is why I believe that any increase in spending beyond the rate of inflation or cost of living increases should be curtailed. It is common sense and as well it is prudent economic policy. It certainly should never be tied to property values as an excuse to raise more spending.

Creative Budgeting

It is important that everyone knows that in 2013 we had a $7,000,000 surplus or basically a 7 percent savings. Yet the same city commissioners increased the budget for the following year and stashed the money in Reserve, telling us that they need the money for a rainy day. In 2008 the rain came and went and we never used our full reserve at the time which was half of what we have now. This year they already stated that they have a million dollar surplus the first six months of the year. All of these savings never translate into a lower corrected budget, and they do not base the next budget on the Actual amount they took in or spent. They are basing the following year on the previous budget neglecting any savings going after public money. This is called Creative Budgeting that only government knows how to do best.

Phase I of the new Coral Springs City Hall

Phase I of the new Coral Springs City Hall

So why are they doing this?

I think that it is because they need to have enough revenue coming in to circumvent the normal bond issue process for the $28 million “Taj Mahal” known as the New City Hall. By letting the taxes increase and not lowering the millage rate to keep them stable, they expect to raise enough money to prove to bond holders that a Revenue Bond instead of a General Public Obligation bond is ok to issue. What is the difference? Revenue bonds do not have the public voting on them, while General Obligation Bonds, which are at a lower cost and lower interest rate, require public vote. The commissioners are concerned that if you had to vote on the bonds you would tell them NO.

We do need a city hall, and I am all for it, but not one that is going to cost us $28,000,000 + expenses, and one thats the citizens are consulted by referendum.”

It could also be that there really is no incentive in this commission to save any money but to spend as much as they can. Their concern is that unless they spend the money and invest it in this city, as a stimulus, then businesses would not want to come here. They are not coming here. That is the fact. So this policy has not worked. As a result, lower wasteful spending (including free lunches for the commissioners) and reduce our tax rate when there is a surplus.

Even more shocking here is the fact that our property values have increased lower than any other city in Broward County. If they had, we would be paying even more taxes, and no doubt the city would have increased their budget to make sure that it is spent.

The main reason residential property owners in Coral Springs are paying more on taxes as well, is because the city cannot count on increased revenues from commercial properties since those have not increased at all over the past two years, and have lowered over the past 5 years. While residential properties have risen, the commercial have fallen. This is because city commissioners have failed in trying to attract more businesses to Coral Springs. They have spent money needlessly on signs leading to the city and have done nothing to promote businesses and get good companies to move here. Putting all of their marbles in one hat, the city courted a Canadian pharmaceutical company to move here. It did not happen. In fact, no one at the city commission talks about this any more because it really was never something that we can count on. In fact, as Dan Daley put it at the last commission meeting “We have been attracting more than our fair share of massage parlors.” I agree with Commissioner Daley on this.

In addition to this 5 percent increase in taxes, water rates, garbage rates are increasing as well.

That is why we need to decide if we really have the right people representing our interests, and not theirs as our commissioners. If it were me, I would have rolled back the taxes, cut wasteful spending, put a referendum to the population asking them if they want to spend $28,000,000 on a new city hall, and given us all back the $1,000,000 through a 1 percent reduction in our tax rate. Not one of our services would have been affected.

After all, that is what elections are for, and I only hope you are paying attention.

About Howard Melamed

Howard Melamed is running for City Commissioner Seat #4 . Melamed is 22 year resident of Coral Springs.  He is a civil engineer and CEO of CellAntenna Corporation which has been located in Coral Springs since 1992. He is also editor of Coralsprings.com.

Should any candidate wish to provide editorial content to this website, in support or in contrast to this article we invite you to do so. 

About Howard Melamed

avatar Howard Melamed is a long-time resident of Coral Springs. He is a civil engineer and CEO of CellAntenna Corporation which has been located in Coral Springs since 1992. He serves on the City of Coral Springs Economic Development Advisory Committee and is the editor of Coralsprings.com.

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  • Barb

    When you allow people who have their own personal agenda’s writing articles for your site it really diminishes its credibility. Sounds more like a campaign speech. First statement made that the commission is voting to raise commissioners salaries fails to mention that by the time they go into effect most everyone on the commission will be out of office. As far as the tax rate increase goes I don’t recall anyone on the commission saying there would not be more paid by residents, if you listen to the whole explanation they said they are not raising the millage rate. They said that the additional money that does come from increased values would be used for normal inflation costs. I guess its creative hearing.

    • Howard Melamed

      I am not sure what to make of the comment. The great thing about writing articles, and I have been writing articles about this city for the last 14 years, is that you put up your personal point of view and then you have people either agree or disagree with your opinion. Anyone running for office will always be accused of campaigning. That does not diminish one bit the validity of their point of view, except for those people that rather not hear it, since it is a critique about the candidate they support or about something personal that they want. I have seen that those that support the other guys always use ‘ campaigning ‘ as an excuse to knock a truthful article down.

      As you wish to defend this increase, and said they said tax rate increases versus actual TAX increases. I never indicated that there is an increase in the tax rate. On the contrary I said that there is no increase in the tax rate but, since they did not lower the millage rate, the rise in property values increases taxes. SO we are paying MORE, not less, this this MORE is greater than inflation rate ( 2.1%) and cost of living rate (1.5%) combined which equals 3.6%! That is the normal. I do not have selective hearing but I at least stick 100% to the facts and provide real information. The city could have arranged the millage rate to correspond to a 3.6% increase in cost of living + Inflation combined, and reduced the tax bill to all of us by 1.4 %. Then they would have a leg to stand on, and I would not have an article to write 🙂

      As I said, they are not math majors. I am.

      • barb

        I was not defending nor disagreeing with it, simply pointing out they explained it differently than you stated.

    • yongo

      Government figures state that the inflation rate is somewhere around 2% the federal reserve bank states that is not even that so a 5% increase along with fee increases seems very questionable or just very poor management of city money. The city manager did say the large tax increase was needed to cover the added costs brought on by the inflation rate (2%) ? Or ???? What ever the city says the inflation rate is. Try selling that to the struggling seniors .

  • Robert Townblinder

    I believe Barb is drinking the Kool-aid. If the money you must pay goes up by 5.2%, that is a tax increase. The commission could have voted to lower the millage rate, they did not. if your garbage, water and fire fees get raised in the budget set by the commissioners, that is a tax increase. If your debt-service millage rate is increased by the commission, that is a tax increase. And if the voters approve the $14.1 million bond issue, causing an additional $20, or more, addition to your tax bill, that is another tax increase. And if your taxes increase on a $14.1 million dollar bond issue how much does the writer think that her taxes will rise with a $30 million dollar bond for the Taj Mahal, oops I mean City Hall? And as to the 65% increase in their salaries, who does the writer know that gets a 65% salary increase for a PART-TIME, VOLUNTEER job?

    • barb

      Again not defending anything, just clearing up facts left out of opinion piece.

  • Coral Springs Resident

    I believe this guy Howard Melamed gets it. He cares about how the city is spending our hard-earned tax dollars. If people do their research on their elected officials they will find some interesting things. Here are a couple.

    1) Here’s a challenge. When you see either Larry Vignola or Dan Daley on the street, ask them if they own property in Coral Springs and pay property taxes. After searching Broward County Property records, it appears that neither Larry Vignola nor Dan Daley own a home, condo, etc in Coral Springs, nor pay property tax. The point is that It is much easier for them to not care about the impact of higher property taxes on the Coral Springs residents if they themselves don’t pay them. Larry and Dan: if you do pay property taxes, post an article on this site to the contrary.

    2) Dan Daley is quoted in another article on the Sun-Sentinel as saying, “The city isn’t increasing the millage rate. Any time property values go up but the taxing rate remains the same, you still have to advertise a tax increase. It should not be counted as a tax increase. Property values are rising; it is a good problem to have.”

    My Comment: Dan, forget law school and learn math. Everyone knows the trick about comparing “tax rates” and “taxes” from year to year. If you knew a little math you would admit that if tax RATES stay the same and property values go up, then the tax bill goes up. Of course you didn’t have to raise tax RATES because you will, by default, get more revenue. The bottom line is that either way if your property taxes will be higher next year vs this year, that is a tax INCREASE. And yes unfortunately you have to report it as an increase even though you don’t think it should be counted as a tax increase. Also, while rising property values can be a “good problem to have”, higher taxes is not a “good problem to have”. You would know that if you paid them. Oh and let’s not forget the other line items on the property tax bill that is related to Coral Springs, such as the fire and garbage fees. Tell us Larry and Dan, did they stay the same also? Here’s a challenge for Dan and Larry: Would you proudly volunteer to pay the property tax bill for a homeowner who may be struggling to pay theirs? Or would you buy property in Coral Springs, start paying taxes yourselves, then revisit your view in 2-3 years? $3000 to $4000 in property taxes won’t allow you much left over in spending money on your commissioner salaries, and I bet you will change your views if you had to pay them.

    3) Larry Vignola is quoted in the Sun Sentinel article, “Every year, the cost of the city doing business goes up, the same way the cost of going to the grocery store goes up. By keeping the tax rate the same, it allows us to compensate for the cost-of-living increases.”

    Comment: Larry, see comment 2. Go back to school, buy Coral Springs property, and pay property taxes. Also, why exactly does the “cost of the city doing business” keep going up? It does not have to. The city is not a business. There is not an increase in demand or shortage of supply for city services (lesson in economics at a later date). The city has no more vacant land to be developed. It cannot attract new meaningful businesses and is losing many, well unless one thinks Dick’s Sporting Goods, Starbucks in the mall, and some retail establishments means that our ship has finally come in. Let’s not forget that new restaurants that open in town seem to always be gone within 2 years of opening. The fact is that the city government keeps growing, buying assets, & spending more money, even during difficult times. Whenever there is money already being collected, a project is found to spend the money on (e.g. branding study). Then even more money is asked for next year or if the property values go up, presto, more money to spend without having to ask for it. What are the results of that “branding study” in terms of bringing more residents and businesses? Do you have any tangible metrics to measure its success? Are we asking people who are moving in if they came because they heard our “new brand”? And just exactly who’s cost of living increases are compensated for, the city staff and workers, and maybe your salary increase if it is voted for in November’s election? Certainly not the average guy’s cost of living. The cost of living of residents is INCREASING due to the property tax increase. The bottom line is that contrary to your words it is not a “cost of living” issue. It is a “spending is out of control issue”. Not everything that city staff or you think necessary is actually so. People grocery shop for necessities, like food and household goods. Projects that plant more trees in a city that already has an abundance of trees, or add sprinklers to medians when natural rain takes care of watering the grass pretty efficiently, are not necessities. A new city hall is not a necessity (especially during a down economy) for any of our residents to live. Who in this city, when having friends and family in town for the holidays says, hey I have an idea, let’s go look at city hall for some fun.

    How many city staff make over $100k salary? Have you looked at the median household income of this city’s residents? Is the household median income of the resident who lives in Coral Springs anywhere near $100K per year? If the residents knew how many staff make such high salaries they would not be as happy to pay property taxes. Here’s an idea Larry and Dan. How about coming out and refusing that raise that you have the voters voting on in November so we won’t have as much of an increase in the cost of living. Also if you drop the silly raise issue you could save some money by not having to put it on the ballot. You should not mind. Being a City Commissioner is a part time position and should remain so.

  • yongo

    Higher taxes more uncontrolled spending larger government higher salaries more borrowing tax increases of 5% fee increases all while residents are just trying to get by, the rate of inflation is two per cent most salaries haven’t increased to just keep up with inflation rate unless you ate an employee of the city of coral springs they got 4%. Senior citizens in coral springs have had an increase in social security for years not that that is a concern of the mayor and commissioners. Added on to the tax increase and the fee increase they want to borrow more money that’s right, they just borrowed a large some of money in the last bond issue and don’t forget that the same people that are sucking the blood out of the residents want a salary increase to keep up with the added taxes and fees that they will have to pay. Where will the struggling families and seniors go for their money to cover the increases? The city manager said that one of the reasons they need all this money is because they are spending more money than is coming in DUR, STOP THE WASTEFUL SPENDING AND CUT THE BUDGET . The march election is coming soon organize behind new candidates and throw the big spenders out. Put in people who are for the residents and not for themselves get rid of two face Dan and his gang he is leading the charge to take your hard earned money and flush it down the toilet.

  • yongo

    I don’t know this guy never met him he is on the money when it comes to the mismanagement of tax payer money. It is obvious that they are not managers and don’t have a clue,they don’t have any financial education the auto repair guy is in the dark the 2 face lawyer speaks and bends the truth the remaining commissioners follow the ignorance. They think the residents are to stupid to understand what they are trying to pull. Don’t let them take your money call the city managers office call the commissioners call and write the newspapers.