A memo from Miami-Dade County Manager George Burgess warns of a budget shortfall of up to $400 million caused by fallen property values.

Building Blocks

Miami-Dade County Releases Troubling Property Tax Income Figures

By Eleanor McCulloch

On July 1, the Miami-Dade County Property Appraiser confirmed what many homeowners and real estate market watchers already knew — home values across the county have plummeted. The 2009 Preliminary Tax Roll, the official taxable value of homes in Miami-Dade County, shows an unprecedented drop in home values, a trend that is expected to result in a county budget shortfall of up to $400 million.

Excluding new construction value, overall home values declined 13 percent, or $31.8 billion from 2008, the tax roll shows. Including new construction, the value of homes in the county is now $222.1 billion — $23.4 billion less than last year.

Pedro J. Garcia, the county’s first elected Property Appraiser, campaigned on a promise that his administration would establish accurate values for all properties in the county by analyzing market data, previous years’ comparable sales, short sales and foreclosure activity.

In a statement, Garcia said that the results are a double-edged sword: while residents will save some money in property taxes, county leaders will have to scramble to balance the budget.
“The decline in the 2009 Preliminary Tax Roll sets the stage for additional tax relief,” Garcia said. “At the same time, it has created serious challenges for taxing authorities as they strive to meet the need for services with a declining property tax base. However, my greater concern is the burden that the current economic decline places on property owners.”
According to a memo sent to commissioners from County Manager George Burgess in anticipation of the results, the figures could have been worse if not for new construction that was added to the property tax roll as of Jan. 1, 2009.

“In order to give perspective as to the magnitude of this loss in property taxable value, staff looked at our property tax roll since 1985 and found that the only year the tax roll actually experienced a decline…was in 1993 as a result of the property damage caused by Hurricane Andrew,” Burgess reported. “Even in 2008, when we absorbed the impact of doubling the homestead exemption from $25,000 to $50,000, the property tax roll was relatively flat. These losses in property tax roll values are unprecedented.”

Although Miami Beach’s property values fared better than many Miami-Dade municipalities, the overall drop in value is in line with the county’s troubling figures. Miami Beach homeowners experienced an overall drop from $26.9 billion in home values in 2008 to roughly $24.7 billion in 2009.

When adjusted for new construction, the city experienced an overall 8.2 percent drop in value.

Downtown Miami experienced the lone increase – a 9.5 percent jump in the value of last year’s $10 billion in real estate, when new construction is factored in.

As a result, and in light of the economic slowdown, the county is bracing for a huge deficit.

“Our property tax-subsidized operations will be facing a budgetary gap of $350 million to $400 million,” Burgess said. “We are working diligently to prepare a proposed budget for fiscal year 2009-10 that to the extent possible, preserves essential services and minimizes service impacts to our residents; however, closing a budgetary gap of this size will require some very difficult decisions.”

The county will notify homeowners of their property’s specific value and taxes via the Notice of Proposed Property Taxes, mailed on Aug. 24.

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