Palm Beach Gardens property values rose 13.9 percent, the highest gain since the run up to the 2008 housing crash, preliminary figures released May 27 by the Palm Beach County Property Appraiser’s Office show.
It’s the first double-digit increase in taxable values for the city since 2006, when values rose a housing boom-fueled 29 percent after four straight years of double-digit increases. It puts the city tax base at $15.4 billion, about double what it was 10 years ago.
The release of the numbers, which reflect the value of property on Jan. 1, marks the beginning of budgeting season, when city and county governments across Florida begin calculating how much money they will have for next year.
For homeowners with a homestead exemption, the increase is capped at 3 percent under state law, meaning the rise is going to hit commercial properties, rental apartments, seasonal homes and new homeowners hardest. Fifty-seven percent of the 30,480 properties in Palm Beach Gardens are protected by the cap, the property appraiser’s office said.
Assessments of individual properties are not yet available and will be sent to property owners Aug. 18.
Taxes now up to the city council
The only way taxpayers won’t be hit by higher city taxes is if city council members reduce the tax rate, a decision they usually finalize in September.
The tax rate has stood at $5.55 per $1,000 of valuation for the past seven years.
After a 3.48 percent increase in property values last year, two Palm Beach Gardens council members, Mark Marciano and Marcie Tinsley, argued for a slight cut in the tax rate but were outvoted by the remaining board members: Chelsea Reed, Rochelle Litt and Carl Woods.
The proposal is likely to gain more traction this year with the rapid rise in property values in the runup to next year’s council election. While Reed is running for reelection in March 2023, Litt and Marciano cannot run again because of term limits.
Former Councilmember Bert Premuroso and PGA Corridor Association Chair Dana Middleton have filed to run for the open seats. Qualifying for the election is from Nov. 15 to Nov. 30.
“Generally, cities are pleased that their numbers are as high as they are,” Property Appraiser Dorothy Jacks said. She pointed out that like everyone else, governments need more money to offset higher costs to keep workers and cover expenses.
“Think of how much fuel governments buy,” she said.
However, she pointed out that the question of whether taxpayers pay more lies not in their property values but in the decisions made by local elected officials.
“In a year like this, there’s a big opportunity to lower tax rates,” she said.
No city tax rate increase since 2011
State law requires that cities and counties calculate the “rolled-back” rate, which determines the tax rate for the upcoming year that would generate the same amount of property tax revenues as the prior year, minus new construction.
If the city sets a tax rate above that figure, it is considered a tax hike. Last year, just two of the county’s 39 cities went to the rollback rate, Jacks said.
The city’s property values went up 11.7 percent before new construction, which likely would still mean a hefty tax rate drop to reach the rollback rate. But cities often are wary of sharply dropping tax rates for fear it will be hard to generate political support to raise them again when property values drop.
The city hasn’t increased its tax rate since 2011, when property values shaken by the Great Recession went down. It has reduced the tax rate twice since then while its overall tax base has doubled.
After the housing boom, the city’s tax base declined four years in a row before stabilizing in the past decade. After a bounce-back 9.85 percent increase in 2019, the rise over the past two years hovered at 3 percent each year.
During COVID, the value of the Gardens Mall, the second-most valuable property in Palm Beach County, dropped by $20 million to $340 million. But with the housing boom, high-end homes have been selling quickly at Alton, with the promise of even greater gains for the city tax base as the nearly 4,000 homes underway at Avenir start coming online.
Cities and counties have a chance to comment on the preliminary tax rolls before they are made final on July 1.
To have held revenues from property taxes unchanged at $69.2 million last year, the tax rate would have had to drop to $5.42.
At $5.55, it was expected to bring in $71.7 million, two-thirds of the city’s $108.8 million general fund.
Gardens’ increase tops in north county
City taxpayers also pay taxes to Palm Beach County and the Palm Beach County School District. The countywide tax base rose 13.5 percent to $252.2 billion and the school district rate went up 18.8 percent to $278.7 billion. The county tax base is lower because it allows more exemptions.
The tax base in no other city in northern Palm Beach County rose faster than Palm Beach Gardens. Tequesta had a 12.9 percent increase, Jupiter Inlet Colony 12 percent, Riviera Beach rose 11.6 percent, North Palm Beach 11.5 percent, Jupiter 10.9 percent, Lake Park 10.5 percent, Juno Beach 9.4 percent and Palm Beach Shores 9.11 percent.
Westlake, a town under construction on a former citrus grove on Seminole Pratt Whitney Road, rose the most in the county at 73 percent.
Manalapan and the Village of Golf were the only other towns that grew by more than 20 percent. Only three big cities had a greater rise than Palm Beach Gardens: West Palm Beach, Boynton Beach and Lake Worth Beach.
The overall tax base in Palm Beach Gardens is fourth highest countywide, behind Boca Raton ($30.5 billion), Palm Beach ($25.2 billion) and West Palm Beach ($17.9 billion).
City’s rising fortune
|Year||Palm Beach Gardens valuation percent change from previous year|
|SOURCE: Palm Beach County Property Appraiser’s Office|
© 2022 Joel Engelhardt. All rights reserved.
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