homepage logo

Plan to pay more, ‘diversification’ or not

By Staff | Sep 23, 2021

With the city of Cape Coral’s second and final budget hearing continued to next Wednesday, Sept. 29, at 5:05 p.m., Cape residents have one more opportunity to make their views known on a near $1 billion fiscal plan that, as tendered, includes an approximate 17 percent boost — almost $43 million more — in the city’s General, or operating, Fund of nearly $296.6 million.

City Manager Rob Hernandez outlined the administration’s goals, based on an “optimistic view” of what’s ahead.

“This budget helps us do the following: expand public safety, improve facilities and amenities, invest in our infrastructure, beautify neighborhoods, add more sidewalks, attract businesses, protect our environment, and strengthen our charter schools,” he said in his budget message.

We agree these are worthy goals for our city and members of the Cape Coral City Council agreed, for the most part, as well. Council has trimmed about $2.2 million overall to set the property tax rate at 6.25 mills, slightly less than the current $6.375 per $1,000 of assessed valuation, the rate at which the budget was originally proposed.

About half of the “savings” will come from postponing improvements at Jaycee Park. Most of the rest will come by phasing in the hiring of 15 new police officers, six new firefighters and other new personnel beginning in December, instead of Oct. 1 when the new fiscal year begins.

The budget includes a focus on what Mr. Hernandez calls “key investments.” Among those he highlighted are funds for: public safety infrastructure, including plans for a new fire station, construction and staffing for a new police training center, equipment and personnel; funding for parks and neighborhoods, including median enhancements and community beautification, construction of a mooring field at Bimini Basin and $800,00 in improvements at Coral Oaks Golf Course, including new cart paths; $1.8 million for incentives to boost economic and business development; $9.2 million for infrastructure improvements, including road and alley resurfacing and $2 million toward the design of a new fleet management facility; and $2.6 million in subsidies for the city’s municipal charter school system.

There are, in fact, lots of “investments,” key — and not — in next year’s budget.

How does this affect Cape residents and businesses in terms of money out of pocket and your next tax bill?

You’re going to pay more.

More in property taxes as Council has opted not to set the millage rate at the “rollback” rate of 5.9962 mills, which would essentially take into account the citywide boost in taxable property valuation of nearly 11 percent. That rollback rate would still bring the city an increase of $4.2 million due to new construction.

More in the Fire Services Assessment, a tax — excuse us, an “assessment” — that recoups 62 percent of the cost of operating the city’s Fire Department. That money, too, goes into the city’s General Fund. There are increases in both “tier” rates: The Tier 1 rate per parcel would be $157.16, an increase from $147.42, while the Tier 2 rate per unit will be $2.54, up from $2.51 in 2021.

The 62 percent recovery will bring in more than $28,109,681 for FY2022.

More for stormwater mitigation, $130 per equivalent residential unit, an increase of $5 from 2021.

More in the Public Service Tax on your electric bill as the city is looking to remove the exemption on the first 500 kilowatts hours of usage.

A new tax on the purchase of natural gas and propane purchases as the city will include that in the 7 percent Public Service Tax.

More for solid waste collection, more if the city mows your vacant lot, more… well, you feel the hand in your wallet.

Former City Manager John Szerlag introduced, and City Council in 2013 approved , two new taxes — the Fire Service Assessment and the Public Service Tax by selling the idea that a broader revenue stream would ensure people are paying for the benefits they receive while also reducing the city’s reliance on property taxes. The benefit to property owners, proponents said, was they would not be the “only ones” bearing the tax burden — it would be spread out among a broader base.

Critics of the “diversification” plan pointed out that it’s not revenue diversification if the money is still coming from the same tax source — the residents of Cape Coral.

They also expressed a fear: That the new revenue streams would simply become exactly that — revenue streams independent of, and in addition to, property taxes, even when valuations bounced back.

Bounced back they have — to an overall taxable valuation of $18.4 billion, still lower than the peak of $21.7 billion in 2007, but up another 10.88 percent over last year.

The boom is back — and the taxes imposed to “protect the city” in times of plummeting valuations are both here to stay and little to no mitigating factor when valuations increase.

City Hall is at 1015 Cultural Park Blvd.

All meetings and workshops are open to the public. We invite you to attend.

–Breeze editorial