Lifted by a real estate boom and federal COVID grants, Miami-Dade County government would for the first time spend $10 billion in a single year under a budget Mayor Daniella Levine Cava unveiled Friday, with more than $40 million in new money for housing relief.
Levine Cava pitched her spending plan as a way to help residents facing rising housing costs, without a tax break that would mostly benefit wealthy commercial landowners and the hedge funds and investors whose aggressive buying in South Florida has inflated housing prices.
“Tackling our housing crisis is the first priority of my administration,” she said. “Miami-Dade is the epicenter of our national housing crisis.”
Owners of property that isn’t their primary residence have a 10% cap in taxable values each year, rather than the 3% cap that resident homeowners receive.
The Levine Cava budget proposal includes more than $40 million for new housing programs, including:
▪ Subsidies for landlords. The proposed “Building Blocks Workforce Housing Initiative” would pay landlords up to $18 million in the first year for charging rents that match the county guidelines aimed at prices that are affordable for middle-class incomes. That would mean a family of four earning less than $137,000 or a single tenant earning up to $96,000. Landlords would get $2,000 a year for every unit rented to someone in that income range. Existing affordability guidelines say a two-bedroom apartment priced at up to $3,000 a month would be considered affordable for those income ranges. Miami-Dade would have money available for up to 9,000 units a year, according to outlines of the plan that county commissioners approved earlier this month.
▪ Expanded subsidies for renters. Using federal dollars, Miami-Dade would loosen income requirements for its original COVID-19 rental-assistance program. Miami-Dade has already distributed more than $100 million in the Emergency Rental Assistance Program, known as ERAP, with another $30 million available. Levine Cava said the administration has not settled on a new ERAP budget or on the expanded eligibility.
▪ Expanded help for homeowners. Details haven’t been released, but Miami-Dade would use federal and state grant dollars to expand existing help for homeowners on mortgage payments and utility bills if they meet income qualifications.
▪ More money to subsidize construction of affordable housing. The 2023 budget proposal has an increase of more than $100 million in funds the county can allocate to developers for housing projects, for a total of roughly $390 million. About two-thirds of the money is left over from unspent funds this year.
As the Miami Herald first reported Wednesday, Levine Cava’s budget has 1% reductions in the county’s four property-tax rates that fund countywide services, municipal services outside city limits, the Fire Rescue Department and the county library system. Miami-Dade last lowered all rates in 2012.
County commissioners are calling for a larger reduction in tax rates as inflation and soaring real estate prices promise record amounts in tax notices heading out this summer if rates aren’t lowered.
Known as “millage,” the countywide tax rate is currently $467 for every $100,000 of taxable value, and would drop to $462 under the Levine Cava budget.
“Making a steep cut to the millage may force the county to cut critical services, like public safety, or raise taxes in future years,” she said. Levine Cava pointed to the housing crash of 2009 that sent tax revenue plunging after a rate cut during the boom years, setting off years of austerity budgets and service cuts.
“This cannot and will not happen again,” Levine Cava said. “It would be very short-sighted to make deeper cuts when we’re facing a potential cliff in an upcoming downturn in the economy and loss of property values.”
Residents would still face a higher county tax bill under Levine Cava’s plan, since assessed values are set to rise 3% for existing homeowners under state law. A memo released this week by the commission’s budget office called Levine Cava’s 1% cut “marginal relief” and said that a 4% rate cut is needed to keep residential tax bills level with this year’s amounts.
Commissioners are scheduled on Tuesday to vote on the maximum property-tax rate for 2023, a number that would be finalized during the September budget hearings.
Rebeca Sosa, a Miami-Dade commissioner, said she’s ready to vote for a larger rate cut than Levine Cava proposed but hasn’t settled on a number. “I think we should go a little bit more,” she said Friday. Sosa said she wants an analysis of what lower tax rates would mean for spending. “How is that going to effect the services we provide?”
Even with a 1% cut in rates, Levine Cava’s budget has significantly more property-tax revenue than the government is spending this year. Under Levine Cava’s 2023 budget proposal, about $2 billion in property taxes would be spent on day-to-day government expenses, up 11% from this year.
Overall, the new budget proposal increases spending 15% over the previous year’s $9.3 billion budget The extra $1 billion in spending includes more than half-a-billion dollars in federal grants, said David Clodfelter, who is Levine Cava’s budget director. The county workforce would also grow by about 600 jobs under the Levine Cava budget, a 2% increase to more than 30,000 employees.
With extra revenue, the budget erases some long-term deficits present in prior budgets. While the countywide property tax was expected to fall about $220 million below expenses by 2027 in the budget Levine Cava presented last year, that deficit switches to a $164 million surplus in this year’s budget proposal.
The county’s unincorporated taxing district — areas outside of city limits that rely on county government for municipal services — is still expected to have deficits, peaking at $19 million in 2028.
This story was originally published July 15, 2022 4:51 PM.