By Sharon Aron Baron
Coral Springs residents will pay less in taxes for 2022 than initially proposed over the summer, thanks to the American Rescue Plan Act — and planning.
In an interview with City Manager Frank Babinec, he said after the addition of ARPA funds, 2022 proposed municipal taxes will drop from .35 mills to less than .2 — or 40 percent less than they planned.
Here is how it happened and what it means for homeowners.
Budget Starts With a Vision
Starting in February with strategic planning, Babinec first gets the commission and staff together. The commission tells what their vision is for the city and what they would wish to see accomplished.
Staff then takes that information, and they build a plan around it, bringing that back to the commission in the form of a strategic plan for them to look at to make sure that the intent of that meeting was met.
Babinec said while this is happening, they spend the next five months building their budget.
“Our department directors have their own budget that feeds back into the city’s main budget. And they tell us what they need to maintain the level of service that our community has come to expect and deserve through the budget process.”
Wants Versus Needs
Then there are some items staff discusses items outside of the budget where are made on wants versus needs.
“I can’t even begin to tell you how many meetings are had between all the departments and the budget team and the city manager’s office. But it is constant basically from February to July, building out that budget,” he said.
“Over the last two weeks, that .35 has continued to fall. So I am extremely confident sitting here today that that .35 is probably going to be about 40 percent less from where we started off with.” City Manager Frank Babinec.
The city then gets to June and July, where they present preliminary budgets to the commission at a business workshop, tying together the strategic plan, business plan, and budget.
They then take the numbers, look at all the funding streams, and ask how this budget is supported by the revenues coming in.
Truth in Millage Rate
And this point, it’s all projections because the city does not get their final taxable values from the Broward County Property Appraiser’s office until July and taxable values from the State of Florida in August.
“Until September 1, we really don’t have it honed in as to whether we’re going to have a deficit or a surplus in the current year’s budget.”
On July 28, when the city has to set Truth in Millage — or TRIM they bring that forward with those projections.
One mill is one one-thousandth of a dollar, and in property tax terms, it is equal to $1.00 of tax for each $1,000 of assessment. When the city proposed raising the millage by .35 mills, they had no idea what their taxable revenues would be from the state.
“We just got those a week ago Thursday,” said Babinec. “We didn’t know with a ton of certainty where our city’s current budget year’s deficit was going to be.”
American Rescue Plan Act
On March 11, President Biden signed the American Rescue Plan Act (ARPA) of 2021 into law. The $1.9 trillion package based on the president’s American Rescue Plan is intended to combat the COVID-19 pandemic, including the public health and economic impacts.
Cities with over 50,000 residents will receive funds, including Coral Springs, which will receive $20 million. Half will be used this year, and the other half next year.
The catch? There are only seven areas the funds can be used: response to public health, addressing economic impacts resulting from COVID-19, restoring government infrastructure, capital projects such as roadway resurfacing, and expansion of broadband.
One of the stipulations is that ARPA funds cannot be used to supplement the budget.
“We can’t take that $10 million in surplus in our budget,” said Babinec. “It’s not allowed. You can’t say, ‘Well, I’m going to take the 10 million dollars and drop everybody’s taxes.’”
Babinec knew the city would be getting money from ARPA, however, he wasn’t sure what they could be used for, so they built a budget framework without including Federal Government funds.
They also weren’t 100 percent sure what the funds could be used for.
“So what we did was, we said, ‘OK, this is going to be the worst-case scenario.’ And if you go back and look and listen to when we set TRIM, I said it from the dais. ‘This is the highest number that we can set, and staff will work to bring that number down, if at all possible.’ And so from July to sitting here today, that’s exactly what we’ve done — is we’ve gone in, and now we’ve honed down the budget to more precise numbers.”
With the ARPA funds and state numbers, Babinec had a good feeling as to where this year’s budget would come in and went back in and redid the budget from the revenue side.
“Over the last two weeks, that .35 has continued to fall. So I am extremely confident sitting here today that that .35 is probably going to be about 40 percent less from where we started off with.”
While Catherine Givens, the Assistant City Manager for Budget, Strategy and Sustainability, works on some final numbers, Babinec said they are pretty confident that they’ll be just under .2 mills.
“And what’s really positive about that is we went into this budget year with a plan from the previous commission and previous administration with a planned .2025 increase. So so we’re going to be below what the planned increase was.”
Instead of using the ARPA funds on the front side, the city-backed them in to ensure that FEMA would not come back to them in five years and ask for the funds back.
“So by using all of the finite numbers that we now have, we’re very comfortable that we will be well below… well below… that .35 that was advertised.”
What Does This Mean For Homeowners?
City taxes comprise only a third of homeowner’s property tax, and since 2018, the city has not had a millage rate increase until this year. For homes with a market value of $397,000 and a taxable value of $256,213, the new millage rate would lower proposed 2022 taxes from $195.25 per year to $156.77. Monthly, it would decrease from $16.27 to $13.07.
My Home Value Has Increased. Why is there a Tax Increase?
Babinec says the city doesn’t take into account increased home values until well over a year later. The property appraiser’s office takes the property values from January 1 to December 31 for the calendar year. Then that’s the numbers the city gets in July of that following year.
For instance, if the home value or property values have changed in 2021, Those changes will be determined on December 31 of 2021, and the city sees what those numbers are sometime in the early summer.
This proposed millage rate for 2022 comes in time for the first budget hearing on September 13, 2021, at 6:30 p.m. For questions about taxes, Assistant City Manager Catherine Givens welcomes your call at 954-344-5920.
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