Wednesday, July 6, 2011

Hefty Taxes For Palm Bay Residents

On July 7th our City Council will have a special meeting on just how high our tax-rates will go. Here are some examples:

Current Millage Rate         7.50        $19,432,409
Proposed Rate                  9.00        $23,318,891
Roll-Back Rate                 9.68        $25,072,731

Note: The word "Roll-Back" is a double-think speech designed to make you perceive that a higher tax rate in the face of declining home values is justified. (If you're willing to buy into this terminology, then I got some beach front property on Mars I'm selling if you're willing to pay into that, as well). It is simply an increase in our tax rates.

According to Brevard County Property Appraiser, our gross taxable value decreased by $744,004,478 (or 29%). I believe the real drop is much more than this because the decrease in residential properties is more than the decrease in commercial properties. This is illustrated on the Brevard County Appraiser's website. Property values in Brevard County has declined by 42% for all properties from 2008 to 2011.

Considering that Palm Bay's gross taxable value have decreased in one year by more than two-thirds of what Brevard County Total Properties' market value have lost in three years, I would say that Palm Bay residential properties are making a harder-than-usual decline. 

When you take into consideration Palm Bay's plummeting home values along with 10.5 percent unemployment and Kennedy Space Center laying off 1,900 people by July 22nd of this year, I think the last thing we should be talking about is raising tax rates and adding fees.

In fact, if we raise tax rates alone, in spite of the lower property values, it will cause six things to happen in Palm Bay in the next few years:

(a) Property values will continue to decline and then stagnate at a certain low

(b) Homeowners will leave and the city will depopulate

(c) Investors will prefer to risk their capital in other cities with lower tax-rates and less or no fees

(d) The lack of capital and new home buyers will continue to erode the city's economy and go bankrupt

(e) Businesses will pack up and leave causing massive unemployment

(f) Crime will exponentially increase

In case you think I'm exaggerating, this has already happened to other cities around the United States. Economist Dr. Stephen J.K. Walters and Historian Louis Miserendino wrote a paper for the Maryland Journal called "How To Make Baltimore A Superstar City" where these two gentlemen researched, what they called, "THE GREAT EVACUATION OF BALTIMORE... between 1950 and 2008" In this great analysis they compare Baltimore to two other cities that also saw massive depopulation, as well: Boston and San Francisco. 

In this paper they described how all three cities saw double digit declines in population, jobs, and exponential jump in crime. However, between the years 1980 and 2000, only San Francisco and Boston saw a major come-back in population, jobs, and falling crime, whereas Baltimore continued to do worse. The common denominator for San Francisco and Boston's success was lower tax rates. Baltimore raised tax rates, thinking that lower property values would compensate for the revenue-grabbing municipality. In fact, Dr. Walters make a great point, saying:

"Those who argue that property taxes “don’t matter much” frequently cite Baltimore’s
generally lower property values as an offset to the city’s higher tax rate. In a
world where property never decays, or where owners do not care about future returns
on their investments, this argument might have some merit; in the real world, it is nonsense."

It's actually quite simple: higher property values are a result of lower tax rates and lower property values are a result of higher tax rates. Now, add a fee to higher tax rates and you can kiss your "bedroom community" goodbye. As the declining property values erode home equity, so will renovations and upgrades diminish overtime. Real property equity is an integral part of an investor's credit establishment to further expand their operation - which in turn creates more jobs. Without the incentive of lower tax rates, the real job creators (i.e. private sector) will decide to take their capital elsewhere.

If City Council approves these higher property tax rates and added fees, then it will be a very, very long time before we'll ever see a real estate bounce in Palm Bay. Until then, we tax payers will get stuck with this heft bill.

Harry Santiago Jr.


  1. Does anyone know if they passed the new tax rate on the July 7th meeting?

  2. Year after year millage increase, my property and income continue to plummet but yet no relief on property taxes amazing I plan on moving my business and residence to a more tax friendly area. Let the idiots on city council continue to fund outrageous Firefighter pensions and decimate palm bay.

  3. To Amy: It was up for discussion, yesterday, during "Special Meeting" (That's code for secret out of the public ear). But I didn't see it as on the agenda for the regular meeting. I believe City Council is supposed to vote on a final tax rate in September - I'll have to double check that.

    To BillH: Don't give up yet, buddy. With more people like you and Amy getting informed and involved, we can actually turn this around. Remember what Miami-Dade did? The citizens there recalled a popular Mayor because he raised taxes and added fees to line the pockets of his cronies.

  4. To Harry,
    Just watched the July 7th meeting on the City of Palm Bays website. Do you know what the "Fire Fee" Special Asessment is that they are trying to raise our Taxes again for? The fire Department is totally out of control again. What can we do to turn this around. One more tax increase for me and will "walk away" from both my homes in Palm Bay. Enough is Enough !!! Kristine again is the only one sticking up for us !!!!!!

  5. If you watch the video of the "special meeting" you can see how worried the Council members are that this tax hike is illegal. They want to go to the State Attorney and Courts for permission. Can the Palm Bay residents do the same in the courts to fight it?

  6. Palm Bay should be doing what they can do to reduce taxes and fees. Under no circumstances should a fire department cost so much that its’ own residence can't afford it. Possibly the counsel members should look into leasing a fire department instead of having the city continue to increase taxes to pay high salaries and pensions. At least Kristine understands that the taxes are too high now and an increase will only cause additional pain and possibly lost taxes due-to citizens fleeing.

  7. To: db
    My thoughts exactly. I tried to get involved with last year's tax increases with no avail, felt like I was fighting all alone, except for a few. The residents of Palm Bay need to stand together and take some kind of legal action against the Fire Department and/or council members. It is apparent that they are not listening to just our voices. Any suggestions on how to do this is welcome.

  8. Here are four great solutions, and if we get started, we can probably stop the ridiculous tax increase or build up enough momentum for a possible recall:

    (a) Get connected with a local activist group that deals with local issues. There's a group I'm a part of called the Conservative Constitutional Caucus (CCC). Their email is: and the Chair's name is Kieth Rigler. We meet every last Monday. Please email Kieth as soon as possible so he can send you updates.

    (b) Show up to the budget workshops and meetings and let them hear you (The People).

    (c) Let your neighbors know what's going on and encourage them to become active, as well.

    (d) Keep reading and guide your friends to local journalism like this one and FLORIDA F.A.C.E.O.F.F. (You see it on the left hand side under "Real Journalism."

    If Miami-Dade can recall a popular revenue-grabbing Mayor. We, too, can make City Council bend to our will.

    db, Amy, BillH, you're all just becoming aware of this and all the other quagmire going on. That's the first step and a good step. The next step is to somehow get active and start shaking things up (positively).

    My hope is that you're all encouraged.

  9. To: Mr. Santiago
    Thank you for the information to get involved. I can only speak for myself, but with all due respect, BillH and myself have not "just" become aware of the situation and the other "quagmire" going on with the City Council and Firefighters. We both actively got involved last year's tax issue and election. We went to council meetings, handed out flyer's,waved at street corners,helped organize informative HOA meetings , contacted Fla Today to do a story on this, did interviews, talked to neighbors, anyone else who would listen, trying to get the residents actively involved and informed of what was going on.As is painfully obvious from the lack of responses to this issue on this very website.It is difficultto keep positive when it seems we were wasting our time, energy and breath, going to work everyday trying to budget our own households, while are elected officials are playing games with are money and can't keep their own house clean.I appreciate your positive approach, but as I found out some members of the City Council and the Firefighters do not play well in the sandbox. If you recall, the Firefighters used scare tactics on the residents of Palm Bay, threatened some City Council members and their families, getting one of their own on the council by any means and so on. Sometimes you have to fight fire with fire (please excuse the pun).It's time to stop trying to go the politically correct way. Palm Bay residents need to take action through the courts or other means !!!! It is obvious that we are dealing with morally corrupt people on the Council and Firefighters.

  10. I didn't mean to make you, Amy, or BillH, feel like you're novices at the filth going on in City Council. You're right, Amy, it's hard to play fair when your opponent isn't playing by the rules. Just give it one more shot, Amy, and BillH. There are times when opportunities present themselves well after those who are awake have been warning people for so long while the masses have been distracted and asleep. Those to whom you've given those fliers and talked to about these issues will remember you while their taxes are being raised, and a new fire fee has been imposed, and their roads lack maintainance because the few are living large at the expense of the many. The American Revolution didn't happen over night. It took years of great activists - like yourself - to ignite the fire of liberty in the hearts of men. The more the British kept injuring the colonists, the more Jefferson was able to write on the Declaration of Independence, and Paine was able to write in his Common Sense pamphlets that appealed to the injured. The more City Council and the Firefighters keep injuring those who are still asleep, it will be our voice of reason which will guide the people's frustrations. Everyone has a part to play in the cause, and Amy, I think you and BillH started something that was an intregal part. I hope you'd join us and continue it :)