2014 County Budget – What To Expect

Next week, county staff will be unveiling their 2014 budget proposal to be discussed at the June 11 budget workshop at 6pm in the Commission Chambers. TAB will analyse the proposal when it is published, but what do we know now and what can we surmise?

• Property valuations are up this year by 3.7%, from $125.1B to $129.7B, according to Property Appraiser Gary Nikolits. See Tax base grows in Palm Beach County, 34 of its 38 cities.
• Using last year’s millage rate of 4.7815, this would produce approximately $620M in county-wide ad-valorem revenue, up about $20M over last year’s budget.
• The Sheriff’s Budget Proposal is requesting $510M – up $38M or 8.3% over last year. This request includes a 2% across the board “cost of living” increase for all employees, in addition to raises already included via contract. (The personal services budget is up over 6%). It also includes $3M targeted for mandated expenses associated with Obamacare.
• Interest from the county’s investments are down about $10M.
• The Solid Waste Authority (whose governing board is made up of the current county commissioners), gave their employees a 3% increase already (pre-budget), as have some municipalities. (See: Raises approved for Solid Waste Authority employees, after three years of frozen pay) It would seem likely that Administrator Weisman would like to do the same for his employees.
• Reserves have been spent down slightly in recent budget years and both county staff and county Comptroller Sharon Bock would like to begin rebuilding these reserves.
• Infrastructure spending, particularly on roads and bridges, has been deferred in recent years and is a priority for some commissioners.

So what can we gather from all this?

Although many would suggest that rising valuations present an opportunity to lower millage (much as millage has been raised as valuations declined), the combination of upward pressure on spending for raises and infrastructure and reserve replenishment, combined with lower revenue from investments, would seem to suggest the opposite. The Sheriff’s request alone will swamp the additional revenue expected from higher valuations.

We have turned a corner, and the valuation declines that have driven the budget since 2008 have bottomed and are now rising. This suggests a different dynamic. Besides the points already mentioned, you should expect that many special interest groups will come forward to claim a piece of the “windfall”, making for a possible feeding frenzy.

TAB believes that in recent years, the county has done a reasonable job in facing economic reality, and the additional revenue this year at flat millage could be used to relieve some of the pressure. Raising the millage rate in the face of improving conditions would be unwise however. If we have truly turned a corner, there will be revenue available in the coming years and some gratification should be deferred.