​by Commissioner Hal Valeche

I think most of you will be quite surprised to learn that Palm Beach County is facing some serious budget problems starting with the budget we adopt this coming summer and continuing, realistically, indefinitely. For the first time since the three or four recession-plagued years starting in 2009, the County Commission is facing the necessity of trimming spending significantly and permanently. I know this is a very difficult concept to get one's arms around, given the image of wealth and prosperity which is typically associated with Palm Beach County. Nonetheless, this is the reality facing us.

Without getting in to too much detail, the situation has come upon us for several reasons. Our property tax rate has been stable for the last five or so years, which I'm sure has been appreciated by homeowners and renters alike. This has allowed property tax revenue to grow in line with the increase in property values, which has averaged about 7% per year since the housing recovery started a few years ago. This incremental revenue has been applied to several exigent needs which the Commission has little control over, such as increased insurance costs, increased public safety expenditures, and a variety of other programs, including our response to the opioid crisis afflicting the County. In a sense, all the incremental revenue we have received has already been spoken for, leaving very little funding for the normal growth in expenses which inevitably occurs. The infrastructure sales tax, which was adopted last year, was in some ways a response to the deferred maintenance of roads, bridges, etc. within the County budget over the past eight or nine years.

In the upcoming budget cycle, County staff estimates that we will be short approximately $47 million with current programs in place and our tax rate the same as this year. In the following years, that shortage will persist at around $50 million/year indefinitely.

Normally, the response of your elected representatives would be to reluctantly raise the tax rate and look for spending cuts which least affect the level of services we provide to you. But the option of raising the tax rate has been precluded by a law which the Florida Legislature passed in 2009, which places an upper limit on allowable tax rates. We will shortly be up against that limit and will actually see our highest permissible rate start to decline in two years, further squeezing the budget. Add to that the probable loss of an additional $25 million in annual revenue as a result of the expanded homestead exemption to be voted on in 2018 and taking effect in 2019, and our revenue picture looks very distressed, even if property values continue to grow at 7%/year. If they grow at a lower rate or, God forbid, decline, the picture will look even worse.

Without the option of generating more revenue, the only budget solution is to find approximately $50 million of expenses to cut every year. This is a very difficult and painful process. The Commission has begun to discuss the problem, but to date no consensus has emerged on where to reduce costs.

As we approach this problem, I would truly welcome your suggestions as to where we should be looking to trim expenses, and your comments on what services you find most helpful. Everything has to be on the table. I hope, with your input, that we will be able to meet this challenging environment with the least possible disruption to the many wonderful services we provide to our residents.

As always, if there is any way that my office can assist you, please contact me at 561-355-2201 or by email at hvaleche@pbcgov.org.