Of Millage Cuts and Property Tax Rebates

The Florida DOGE Commission investigating Manatee County may or may not find some spending malfeasance on the part of Manatee County, but the much bigger problem lies with incoming revenue which has generated a cumulative 1.99 billion surplus since 2017. During that time, expenses have grown 8.7% annually, but incoming revenues in the form of property taxes, grants, ancillary taxes and charge for services has grown 14.1 % annually. This large difference in growth rates between revenue and expenses explains the cumulative $1.99 billion surplus since 2017. So, the first priority should be to more closely match revenues with expenses to reduce the large annual surpluses. And, the best way to do that is a substantial millage cut.

Currently, Manatee County residents are paying property taxes at a 6.8435 millage rate per one thousand dollars of assessed value which generated $428 million in property taxes for the current fiscal year through May. A one point millage reduction would reduce property taxes collected by 14.6% or $62.5 million and bring the current year's surplus down from $255.8 million to $193.3 million. A two point millage reduction would reduce property tax revenues by $125 million and drop the current year surplus to $130.8 million. Not a perfect move to a balanced budget, but a huge step in the right direction.

Because of the $1.99 billion surplus generated since 2017, Manatee County's balance sheet is bloated with unrestricted cash ($898.0 million) and is $505.6 million above what Florida statute 129.01c1,c2 says the county can legally hold. To address this issue I am suggesting a property tax rebate against next year's property taxes. An immediate 25% property tax rebate (in the form of a check sent to every property taxpayer) would cost $107 million and still leave an unrestricted cash balance of $791 million. A 50% property tax rebate would cost $214 million and would leave an unrestricted cash balance of $ 684 million. If Governor DeSantis really wanted to achieve zero property taxes in at least one Florida county this year, he could send out checks to Manatee county taxpayers for the full amount of property taxes paid this year ($428 million) and there would still be $470 million of unrestricted cash left on the county's balance sheet -

more than enough to satisfy the cash balance and contingency requirements of Florida stature 129.01c1, c2.

In summary, I am hopeful that the Florida Commission investigating Manatee County will address the problem of large annual surpluses and bloated cash balances on the balance sheet. In doing so, it would be doing a huge service to Manatee County's economy and its cash-strapped citizens.

Mike Meehan, CFA, MBA
Bradenton