Mulling the Millage Rate: Part 2 of 4

Too Costly

We now turn our attention to the second of KFC’s four arguments against reducing the millage rate, aka the ‘too costly’ argument, which for the sake of fairness I will let Kirk explain in his own meandering words:

Here is my attempt to distill the argument while setting aside the heavy haves-vs-have-nots undertones. This summary incorporates the essence of various cost-oriented comments from other members of KFC:

The proposed 2% reduction of the millage rate would have significant negative impacts on the city's budget and services. This decrease would cost the city approximately $2.6 million in recurring revenue, inevitably hindering municipal services, including public safety and sanitation. While revenues have increased substantially in recent years due to higher property values, the demands placed on city departments have grown correspondingly. The $2.6 million budget reduction would impede the city's ability to fill 23 new full-time and two part-time positions—all of which have been factored into the upcoming budget—thus further diminishing the quality of services.

It seems like only yesterday when KFC wanted to add tens of millions of dollars in long-term debt to the city’s books so it could reward a bunch of retired millionaire cops with an extravagant COLA that would do precisely nothing to attract new officers or improve public safety. Good times, good times.

But that’s neither here nor there. Let’s pick some low-hanging fruit that isn’t quite as overripe. Both Lago and Anderson made it abundantly clear that municipal services—especially public safety—were off limits vis-à-vis prospective budget cuts. I agree with this approach, even if I’m not exactly thrilled with the idea of any municipal agency earning “sacred cow” status. Nor am I willing, vacancies or not, to embrace unreservedly the cynically perpetuated notion that our police and fire departments are dangerously anemic and just barely being held together with little more than chewing gum and baling wire.

On the bright side, at least we know that if the Little Gables annexation fails at the polls, we can always stage a land invasion and take it by force.

Nevertheless, Lago and Anderson taking police and fire off the table should have precluded any public safety fear-mongering with regard to the proposed tax cut. But it didn’t, naturally.

Instead, KFC called the fire and police chiefs up to the podium to explain to the rest of us rubes how theoretical budget cuts that would not affect their departments might somehow affect their departments. Their relying on Hudak, in particular, put quite the bizarre spin on “good cop, bad cop.” You may remember how a few months back, while the city was in the midst of contract negotiations with the police union, Hudak was KFC’s public enemy number two, an anti-police police chief, a real morale killer. Now, and because it’s politically convenient, Hudak’s competency is once again unquestionable, his word unimpeachable, his integrity beyond reproach. Just like that.

But the truly galling case of KFC hypocrisy lies in the narrative itself. They’ll have you believe that no one takes public safety as seriously as they do, which is why they are so sincerely, so deeply, so intensely concerned with the so-called epidemic of police vacancies. We’re understaffed! We’re stretched thin! We don’t have enough officers patrolling the streets! Dr. Castro, for her part, won’t shut up about it.

The problem is, these are the same people who requested personal police escorts earlier in the year when they received all those super-scary-yet-completely-invisible threats that suddenly vanished into the mist the moment they pulled off their wildly unpopular hit on Peter Iglesias.

These are the same people who, less than two weeks ago and unbeknownst to Lago and Anderson, had the city manager, who won’t so much as go to the bathroom without Ariel’s permission, assign personal police details to each member of the commission in the wake of the failed assassination attempt on Donald Trump.

I kid you not.

As expected, Lago and Anderson were none too happy about this. Not only did neither request this protection, not only did neither want it, neither was even informed. Fortunately, both had their police details removed as soon as they caught wind of them. I’m told that Lago, who was out of town when he found out about the detail, fired off a pointed email asking the manager why he, the city’s mayor, was not made aware, much less involved, in that decision.

But we already know the answer, don’t we? It’s an old and familiar refrain. We have a city manager that will only answer to certain members of the commission; the ruling coalition. The same coalition that denied Lago and Anderson an opportunity to even meet with Rojas before he was spontaneously and unilaterally hired.

How ironic.

And we know damn well who within that coalition ordered that detail. It was the only man on that dais—the only person in our entire community, frankly—delusional enough to connect himself to an attempt on a former president’s life. The only member of the commission who trots around town handing out his own Kinko’s Print Shop proclamations while wearing a shirt with a sewn-on patch the size of an interstate billboard that reads “Commissioner.” The only man who’s so prodigiously self-aggrandizing, he is able to say to himself with a straight face, “They just tried to kill one of the most powerful men in the world…I might be next.”

“Movin’ on Up:” As you can see by the reflection in Ariel’s glasses, Kirk has been promoted to Ariel’s personal photographer.

Needless to say, this whole “a-tax-cut-will-overburden-an-already-depleted-police-force” talking point is awfully rich coming from three moochers who think nothing of turning the Coral Gables police department into their very own Secret Service.

By the numbers

Some like to say that a 2% millage rate reduction would cut $2.6 million from the city’s budget. They like to say it that way because it’s one of those things that’s both true and misleading all at once. When the average person hears the phrase “cut from the budget,” they assume it means we’ll have less money than we had before. We had X last year, so next year we’ll have X-$2.6 million. But that’s wrong.

The city anticipates a $10.2 million boost in property tax revenues for the next fiscal year, assuming the current millage rate remains unchanged. It's important to note that every penny of this additional revenue stems from the recent surge in property values. The frequently referenced $2.6 million "loss" is actually $2.6 million less than the projected $10.2 million gain. Consequently, if the millage rate were indeed reduced by 2%, the city would still collect $7.6 million more in property tax revenue than the previous year and twice as much as the city collected in 2022 and 2023. This demonstrates that while our tax rate may have held steady for nearly a decade, our actual tax burden has undeniably grown.

This kind of semantic manipulation is hardly uncommon. Virtually every bureaucracy across every domain engages in it. You’ve probably read news headlines that read, “Congress slashes such and such agency’s budget by $50 billion,” when in reality that agency received $50 billion more than it did the year before. It just didn’t get the massive $100 billion increase it was asking for. That’s what a “slashed budget” means in bureaucrat speak.

As for other tricks, don’t get me started on the frenzied shopping sprees and wild parties that the various departments at my old university would organize at the end of each fiscal year. The worst thing a department head could do was end the year with money left in his account, for appropriators wouldn’t award budget increases to departments that didn’t “need” them. Welcome to the perverse incentives of incremental budgeting—frugality is punished and waste is rewarded. You want more money next year? You better make sure you spend every last penny you have this year, no matter what it takes, so get your butts over to Smith and Wollensky for those team-building lunches already!

All of this, by the way, is why you don’t simply defer to staff on budgetary questions. Asking a bureaucrat if they want more money to work with is like asking your teenaged daughter if she wants a bigger allowance. What do you expect her to say?

But back to the numbers. With a 2% millage rate reduction, next year’s total projected property tax revenue comes in at $127.2 million versus $129.8 million at the current rate. Total revenue, from all sources, would come in at $263 million. That means that all this Chicken Little doomsdaying is over a 2% tax cut that equates to slightly less than 1% of the city’s total revenue stream.

Of course, city staff saw this extra revenue coming and increased planned expenditures commensurately. $1.62 million of those increased expenditures comes from 25 new positions that will almost certainly never be eliminated once they’re created. Are all these positions absolutely necessary? Is each one truly mission-critical?

Consider the following: since 2016 the population of Coral Gables has increased by a whopping…160 residents (some estimates actually show a slight decrease). Nevertheless, our city added 96 new employees to its roster in that same period. That’s one new city employee for every 1.7 new residents. That’s a government that is 12.7% bigger for a population that is 0% bigger. When it comes to improving city services, maybe it’s time to try something other than “always hire, never fire” for a change.

Any number of externalities could easily cause a 1% loss in expected revenue year over year. One would hope our city is prepared for that. If not, if the city’s finances are so fragile that subtracting $2.6 million from $265 million in revenue threatens to destabilize municipal operations and diminish services, then, frankly, we are in much deeper trouble than anyone could have imagined.

The ‘too costly’ argument, therefore, is not so much an argument as it is a potential indictment. We should celebrate the fact that it’s objectively bogus.

We’ll look at the “too ineffectual” argument in Part 3…