Mayor Gimenez led the drive to reduce property taxes, a popular move, and then
started making cuts and layoffs to try to compensate for the lower revenue. Now
he wants to raise property taxes to make up for a projected shortfall of $208
million in the next budget year.
How convenient that out of a $6-billion budget, the shortfall somehow hits youth programs, libraries and the arts! Presumably these are programs that voters will be glad to pay for. After all, they have been paying for them for many years. But even if property taxes are increased to maintain these services next year, what about future years?
Surely the 3.5% shortfall could be offset by trimming some fat from a budget that is bloated in so many ways. Raising property taxes and/or continuing layoffs and cutbacks will have negative effects on Miami-Dade's economy--and future revenues.
Lower property values generate lower revenue. Raising property taxes will not improve values. Layoffs just trade payroll dollars for increased social costs, so we get more distressed homes, even lower values, and more unemployment. Just as adding one good job eventually creates four more, cutting one good job leads to the loss of four more, and the cycle continues.
We can create more good jobs, and reverse the downward spiral, increase values, and raise revenues the right way. Trying to create jobs by "stimulus" funds and giveaways always fails, because you can't solve a demand-side issue from the supply side.
The solution to job creation and starting an upward spiral is to organize demand for products and services that reduce long-term costs for the customers, such as solar-energy systems, hurricane-proofing homes to reduce energy and insurance costs, and SuperClinics to improve health-care quality while slashing costs. This could create tens of thousands of jobs in Miami-Dade over the next two years--jobs that will enable people to buy distressed homes, and create more jobs.
It is time for a publicly owned SuperBank in Miami-Dade County. It can be started at no net cost to taxpayers. It could provide 2%, 15-year mortgages that would clear the inventory of distressed properties and create employment like we have never seen before. It could provide cheap financing for wealth-creating products and services (those that save many times their cost). It could pay 5% on CDs and make all the money it needs by issuing 6% credit cards. It would even be a huge benefit for our local commercial banks. The county could earn $100-200 million per year by saving residents money. I have written and spoken on this subject since 2009.
I would be happy to meet with Mayor Gimenez, commissioners and other interested parties to explain how we can do all of this without cost to the taxpayers. More information about these programs is on my website, www.khavariforgovernor.com.
Farid Khavari, PhD, is an economist, author, and independent candidate for Florida governor in 2014.