"Your Taxes Will Go Up"

I hate those signs.  And with a vote not expected until 2015, we will all be looking at them for a very long time.*

[*2018 edit: it's years later, and those signs are still here!]  

Railing against taxes hasn't been as popular in America since tea was being thrown in the Boston harbor.  Taxes obviously pay for necessary services, but 100% of the people are never going to agree on the definition of "necessary."  Seniors, for example, may object to paying for schools if they don't have children (but will be sorry 10 years later when zombie skater punks crash through the front door).  And yuppies (is that still a thing?) might object to paying for libraries (also known as "the place where homeless people can use the internet").  And of course the tea party just wants to "drown government in a bathtub," but that's for another blog.

Today's discussion of taxes at the local level begins with the multi-colored "Real Estate Property Taxes" bill you receive every year in around October.  You must still have yours from last year, so go and get it (it's a blog... I can wait).  Then follow along.  C'mon. ... it'll be fun!

There are 5 sections of the bill:
Miami-Dade School Board appears in pink
State and Other appears in orange
Miami Dade County follows in blue [the focus of this post]
Municipal Governing Board is in green

Then there is a white box for "non-ad valorem assessments" where (if applicable) any special taxing districts, such as guard gate, roving patrol, other security, garbage service, etc. are reflected.

In Miami Dade County section, you will find these line items:
County Wide Operating
County Wide Debt Service
**Unincorporated Operating**  <-- focus!
Library District
Fire Rescue Operating
Fire Rescue Debt Service

In the geographical area under study by the Municipal Advisory Committee (the "MAC") - an area described and pictured in the first post entitled "Nomenclature" - the "Unincorporated Operating" millage rate is 1.9283.  This means that for every $1000 of assessed property value we pay $1.9283 (so a $100K assessment would result in being charged 100 x 1.9283, or $192.83).  All that other stuff isn't going to change - not even super-wealthy Aventura has its own Fire Department.

You can find a table of all the millage rates in Miami Dade County at: http://www.miamidade.gov/pa/library/2017-proposed-millage-chart.pdf. 

Rates range from a low of 1.7261 in Aventura to 9.7000 in Biscayne Park.  Also notable is North Miami Beach at 6.6036 (annexation by NMB is used as a "scare tactic" by the pro-incorporationists).  Our rate is the "Uninc. County" amount of 1.9283.

If "West of Aventura" became a new city (Village-At-Law, West Aventura, etc.), it would have a new millage rate, so the 1.9283 would change to "X".  The question is: will "X" equal the lower rate of 1.7261 Aventura pays (answer: no, we don't have the 3rd largest mall in the universe), or will it be closer to the 6.6036 paid in neighboring NMB.  The answer is "something in between."  Even Sunny Isles Beach (incorporated 1997) has a rate of 2.700, and they have more million-dollar condos than God (what do they do with all that money?).

The accounting gurus within a subcommittee of the MAC have cooked up a budget that results in a millage rate equal to the current 1.7261 rate, but as they say in securities prospectuses: "past performance is no guarantee of future results."

So let's make a worst-case scenario: let's assume the "new city" millage rate eventually matches NMB's rate of 6.6036.  How would our tax bills look in that event? 

Well, using a tax bill of a local celebrity (identity concealed) who has an "Unincorporated Operating" tax in 2013 of 274.63.  If the 1.7261 rate was increased in "new city" to the NMB rate of 6.6036, the "Unincorporated Operating" tax in 2013 would have been $940.50, which would be an increase of $665.87 - not chicken scratch by any means, but the net effect on the bottom line would be 19% - and this assumes a "worst case" millage rate equal to NMB (under the best case the increase would be 0%, so assume something in between).

Another example, taking another local celebrity, this time from the condominiums where all the "No to Incorporation" signs come from:

Remember in school when you learned that any number multiplied by "0" is "0".  Well, here is the practical application: No matter the millage rate, if you have a bunch of exemptions and a low-value property, you are not going to notice any difference at all.  So congrats, whiny condos: you get a shiny new city, more police, maybe even a bus service to the mall or bingo or whatever it is you do, and you don't owe uncle County one red cent next year, just like last year.  So stop printing all those damn "NO" signs that moan about taxes, and concentrate on the developers! 
 
Ok, one more celebrity: a more recent resident (like many people reading blogs), and from inside Highland Lakes (like most people who are attending meetings on incorporation).  As a more recent homebuyer, this taxpayer has a higher assessed value, because he/she/they didn't buy their home when it cost some multiple of the what the people who bought 30 years ago paid.

Whoooeee!  That's a tax bill that would make a person in the condominiums cry.  Total bill is $7,464, of which $656.21 is for "Unincorporated Operating" at the current millage of 1.7261.  So again, assuming a "worst case" rate of 6.6036, this taxpayer's rate in a new city would be $656/1.721 x 6.6036 = $2510, an increase of $1853, or about 25%!  See why the people on the "YES" to incorporation side use annexation by NMB as a scare-tactic?   

So the conclusion is: if there is a tax increase, it will be experienced disproportionally by (i) people who own homes in the NE, not condos in the SW, (ii) people who moved to the area recently, more than those who have lived here for decades, and (iii) people who want the very services they will have to pay for.  These are all generalizations of course, but I think they are fair ones, and to reiterate: these calculations are "worst case" and should not be anywhere CLOSE to the NMB milage rate.

I end the post with a math assignment.  Take the number from your last tax bill in the blue section called "Unincorporated Operating", then divide it by our current millage rate of 1.7261, then multiply it by whatever rate you think we will end up paying in the future (you can even choose your own rate from the table at the beginning of this post).  Then you can make an informed decision as to whether the benefits of incorporation are worth that extra price tag.  Let me know in the comments: (i) your assumptions (what the rate will be); (ii) how much more you end up paying, and (iii) whether you think the benefits exceed the cost, or vice versa.

Not interested in all the math?  Well, if we were annexed by Aventura, you could just put down your pencils because everything would be about the same.  

Unfortunately, as as will be explored in the next post, the County doesn't appear interested in having us pursue annexation discussions.  Analysis of the critical 2/27 county meeting on incorporation/annexation in the next TWO posts!