Taxes and budgets are frequently in the news due to their constant influence on the local economy, public policy, and the lives of individuals.

The aspects that directly correlate with these discussions are;

1) Economic impact: taxes and government spending directly impact the economy. Tax cuts can stimulate spending and investment, while tax increases can slow growth. Similarly, government spending on programs like infrastructure can affect economic activity.

2) Public public debates: discussions about taxes and budgets are central to public policy debates. These debates involve different viewpoints on the role of government in the economy, the distribution of wealth, and the allocation of resources. 

3) Local government revenue and spending: taxes are the primary source of revenue for governments, which they then use to fund public services like public safety, parks maintenance, municipality operations and and infrastructure.  Budget debates often revolve around how much government spending is necessary and how best to allocate resources. 

4) Local government debt: municipalities often use debt to fund infrastructure projects because it allows them to spread the cost of these large, long-term investments over time, rather than incurring a large upfront expense that could strain their annual budgets.

5) Economic cycles: economic cycles, such as recessions/inflationary periods or booms, can significantly impact tax revenue and government spending. During a recession, tax revenue may decline as businesses and individuals earn less, while government spending on programs may remain the same and in some cases increase. 

6) Law and regulations: tax laws and regulations are constantly evolving, and changes to these laws can have significant impacts on individuals and businesses. Discussions about tax loopholes, tax breaks, and the fairness of the tax system are common in the news. 

Local governments are required to adopt a balanced budget each fiscal year (starts October 1 and ending September 30 of the following year). Per Florida Statutes (166.241) the budget must be adopted by ordinance or resolution unless otherwise specified in the respective municipality’s charter.  Under state law, every local taxing agency must hold two public hearings before adopting the budget. Every property owner receives a letter from the county property appraiser announcing the proposed tax rates along with times and dates for the hearings.

Additionally, Florida municipalities are required to conduct annual financial audits to ensure accountability for public funds and transparency in financial operations. This is also mandated by state law, specifically section 218.39, F.S., which requires audits of financial statements to be completed within nine months of the end of the fiscal year (September 30th).

Per Florida Statute (200.065), these meetings shall be held after 5 p.m. if scheduled on a day other than Saturday.  No hearing shall be held on a Sunday.  This is to make it easier for people with 9-5 jobs to express their views to local leaders.  In complying with this requirement, many municipalities push their meetings further (e.g., 5:30 p.m., 6 p.m., etc.).  The Town of Southwest Ranches, holds their public hearings starting at 7 p.m.

The Big Three taxing agencies are the Broward County, Broward County School Board,  and the Town of Southwest Ranches. Smaller amounts go to agencies such as the Broward County Children’s Services, the South Florida Water Management District, and the Hospital Districts in Broward County.

TRIM = Truth-in-millage

A TRIM notice is the official Notice of Proposed Property Taxes. Importantly, a TRIM notice is not a tax bill. The TRIM notice details the ad-valorem rates and non-ad valorem assessments set by the various taxing authorities. The taxable value of your property is determined by the Broward County Property Appraiser’s Office.

Yes, you can see your TRIM notice at the Broward County Property Appraiser’s website.  You may search using the owner’s name, address, and property ID (folio) among other things.  Website information is listed below for reference.

https://bcpa.net/RecMenu.asp

https://bcpa.net/homepage.asp

It’s the property tax rate. A “mill” is $1 in tax for every $1,000 in taxable real estate value.

The Town of Southwest Ranches’ millage rate is 3.9000.  Using the refence above, a home with a taxable assessed value of $850,000 would stand to pay in taxes (just for the Town) the amount of $3,315. This amount does not include non-ad valorem assessments.  Formula: taxable value divided by 1,000 and multiply by the millage rate.

A non-ad valorem assessment is a special assessment or service charge which is not based on the value of the property. Non-ad valorem assessments are assessed to provide certain benefits to your property including services such as:

1. Fire Protection and Rescue Services; and
2. Solid Waste Collection, Disposal, and Recycling Services.

Non-ad valorem assessments are included in the total amount due shown on your property tax bill.

Per Florida Statutes (200.081), no municipality shall levy ad valorem taxes against real property and tangible personal property in excess of 10 mills ($10 per $1,000 in taxable property value).

It’s important to note, that once a taxing authority sets the tentative millage rate, they cannot adopt a higher millage rate without restarting the process, but they can adopt a lower millage rate.

Not necessarily. There are several factors which can cause your tax bill to increase even if a taxing authority decreases its millage rate. For example, if your taxable value has increased, it may offset any millage rate decrease. Additionally, if other taxing authorities raise their millage rates, your overall tax bill may increase.

The tax bill includes the local municipality (Town of Southwest Ranches) rate plus non-ad valorem if applicable, and all other taxing authorities (e.g., county, schools and others).

The formula to calculate your property tax bill is your home taxable value divided by 1,000 and multiply by the millage rate (3.9000).  This process needs to be repeated for all other taxing authority (e.g., county, school board, etc.).

Market value: this is the estimated fair market price of a property, considering factors like comparable sales and the current economic climate. It’s what a willing buyer would pay to a willing seller in an open market transaction. 

Assessed value: this is the value used to determine property taxes. It’s the market value adjusted for various assessment limitations, such as the Save Our Homes benefit, which limits annual increases in assessed value. For example, the “Save Our Homes” cap for homestead properties limits the increase in assessed value to 3% (or the CPI, whichever is lower).

Taxable value: this is the value on which property taxes are calculated. It’s derived by deducting any applicable exemptions (like homestead) from the assessed value. For instance, a homestead exemption can exempt a portion of the assessed value from taxation, reducing the taxable value.

When someone owns property and makes it his or her permanent residence or the permanent residence of his or her dependent, the property owner may be eligible to receive a homestead exemption that would decrease the property’s taxable value by as much as $50,000.

• The first $25,000 of this exemption applies to all taxing authorities.
• The second $25,000 excludes School Board taxes and applies to properties with assessed values greater than $50,000.

Amendment 5 was approved by Florida voters in the November 5, 2024, general election. This amendment to the Florida Constitution amended Florida law to add an annual positive inflation adjustment based on the Consumer Price Index (CPI) to the second $25,000 homestead exemption for properties. This second homestead exemption is applicable to all levies except school district levies. See section 196.031, F.S.

Yes, sometimes much faster.  “Save Our Homes” is supposed to protect property owners from these increases.

Yes. The “Save Our Homes” cap in Florida limits the annual increase in the assessed value of a homestead property. This limitation, prevents property taxes from drastically increasing each year, even if the market value of the property goes up. The cap is 3% or the Consumer Price Index (CPI), whichever is less. 

Yes. This is one major con as it can create inequities, as new homeowners may pay significantly higher taxes than long-time residents, even if their properties are worth the same.  Another drawback is the potential for the “recapture rule”. This mean that even if the market value of a property decreases, the assessed value can still increase by 3% each year (or the CPI, whichever is less) until it catches up the market value.

Save Our Homes benefits are portable from one home to another within the state. If you sell a house with a market value of $850,000 and an assessed value of $350,000, you get to deduct the difference ($500,000) from your new home’s value.  For example, if the newly purchased house cost you $1,000,000, your assessed value would start at $500,000.

In most cases, you pay slightly more. This happens as the property assessed value typically increases year over year. In the case of an owner-occupied home that is eligible for the “Save Our Homes” exemption, its net taxable value will not exceed 3%.

Under this scenario and assuming you have a homestead exemption, the Town probably passed a very small tax cut, the value of which was less than the increase in your assessed value.

For example, a Town resident with a homestead exemption and a current assessed value of $1 million and millage rate of 3.900 receives a rate of 0.1000 to 3.8000.  With no change in the assessed value, this reduction would represent a net changed in the following year tax bill of $100 ($3,900 year 1 versus $3,800 year 2).  However, if the resident’s home assessed value increases to $1.1 million in year 2, the new tax bill would result in a net change (increase) of $280 ($3,900 year 1 versus 4,180 year 2).

Municipalities may approve small millage rate reductions to provide property tax relief to residents and lessening the tax burden on homeowners.  This is accomplished while generating enough revenue through the Town’s budget to fund essential services.

The Town has been able to maintain the same millage rate of 3.900 during the last few years. In fact, this has been the lowest it has been in over a decade.  Currently, the Town ranks among the lowest millage rate in Broward County.

There are many factors that contribute to these differences.  The key reasons are property tax reliance, home values, and local spending.  For example, municipalities with high property tax reliance and low property home values would need to have higher tax rate to provide their services.  Additionally, municipalities with few land developments, or few high value developments may affect and that rely on property taxes, would also be required to have higher taxes to ensure required services are met. 

Other factors affecting these differences are:

• Services offered: municipalities do not provide the same services. In addition to public safety, some municipalities provide their own libraries, cemetery, etc.
• Wealth of municipality. wealthier municipalities tend to have more high-value real estate and lower tax rates.
• Type of municipality: big municipalities which may experience a latitude of problems (e.g., violent crimes) compared to others in suburban areas, can be costly.  In addressing these problems, it would be required a bigger police departments, and higher labor costs.
• Age of municipality: older municipalities tend to have heavier pension burdens.