There was recently an article in TC Palm regarding “historic” increases in property valuations. The nearly 10% increase across the county’s municipalities property valuations in aggregate does not mean Martin County will have 10% more real estate tax money being collected.
Because of caps and exemptions, the increased amount flowing into government coffers will be less than what it seems by looking at just the raw data. If you combine that with the inflationary pressures that Martin County and municipalities have experienced, I wouldn’t be surprised if there is a breakeven to maintain the current level of services.
Government is suffering even more than the private sector in recruiting and retaining employees. Planners and engineers plus custodians, park employees, and other maintenance workers are in short supply. There are signing bonuses and other incentives to find enough qualified employees.
Last year there were less money allocated in the budgets of Martin County public works and other non-public safety departments because of last minute changes made by the BOCC. MCTA is hoping that will not occur this year. One of Martin County’s practices is to build new projects without allocating money for maintenance of properties already in its possession.
Martin County only had a 5.3% increase in property values. That reflects the dearth in new homes and commercial projects that were built in the county last year. Stuart had a 12.3% increase due to new projects being completed. Ocean Breeze’s 38.9% jump was because of Sea Walk development being finished. I can see a large decrease in the tax rate going forward for that municipality. Sewall’s Point and Jupiter Island are at about a 10% increase in valuation due to new homes and existing renovations.
The outlier in the crowd was Indiantown which lost 5.5% in value. This is despite new projects and increased prices for existing homes. FPL, the largest taxpayer with paying over 80% of the village’s taxes, had less personal property on hand. Village Manager Brown is not recommending any increase in taxes. He is right since there will be additional projects coming online this year and next which will increase future taxes.
While it is great that we are experiencing a boom in values today, MCTA is cautious about whether tax income will be sustainable in the future. We could be heading into a recession which would decrease valuations and put other new projects on hold. There was another study done stating that Martin & St. Lucie Counties were in the top five of overvalued rental markets. This could be beneficial in reducing rents when a downturn happens but also could reduce property values that would translate to lower real estate tax revenue.
Increased taxable value does not equate with taxes going up by the same percentages because of the overabundance of exemptions built into our real estate tax code. Once the different limitations and tax caps are factored into taxable values it becomes a very different picture. Just like with the federal income tax system, Florida’s real estate tax system produces no two taxpayers that pay the same amount of taxes based on their taxable value or income.
MCTA believes that tax rates should remain stable next year. Governments are preparing for another exemption being passed in November which will mean less taxes being collected. This is a wait-and-see period.