The climate change bills are mounting in South Florida — and they’re astronomical. There are roads to raise, stormwater pumps to install, homes to elevate and businesses to floodproof, projects with price tags already running well into the billions for coastal communities.
Buy/sell, rent/lease residential &
commercials real estate properties.
In the Florida Keys — the state’s ground zero for sea rise flooding threats — the estimated cost to raise and strengthen Monroe County roads alone for the coming decades is $1.8 billion.
For a small county with an annual budget of $667 million, getting the work done has so far required relying on “other people’s money,” as county administrator Roman Gastesi puts it. That means state and federal grants.
But with a long list of projects and growing competition from other communities facing increasing risk, grants won’t be enough in the coming years. In Monroe, the climate threat is already considered so serious that political leaders are now pushing a bold plan built around a typically unpopular option. They want to raise taxes — in this case, sales taxes. And to do that, they’d also have to make another significant change — wrestle decision power from Tallahassee lawmakers to become a “home rule” county like Miami-Dade.
Those aren’t the only challenges. There’s another money concern linked to climate change looming down the road. Researchers project that Monroe — and vulnerable cities like Miami Beach and eventually, much of coastal Florida — will face the prospect of declining property values from increased flooding, which could mean declining tax revenue and shortfalls for basic services, not just resilience projects.
Monroe’s planned government overhaul and sales tax hike underline the clear and imminent threat climate change poses for the Keys, a string of islands that arguably rank the most at risk from sea rise of any coastal community in Florida.
Monroe started planning for sea rise more than a decade ago, and has been aggressive and successful in securing outside funding, winning a $2.6 billion federal project to strengthen U.S 1, the state road linking the island chain, elevate scores of homes and protect important businesses and buildings from flooding. The county has also brought home millions from the state’s Resilient Florida grant program, the main way the state has been helping local governments adapt to the threat of sea level rise.
But other counties are also now planning for inevitable future impacts, and the requests for state and federal cash are already overwhelming the budgets set aside to fill them.
That’s why Monroe leaders believe it’s critical to create a new, dedicated funding source just for transportation and resilience projects. It would come, if county voters sign off, from an additional 1% sales tax.
Gastesi said it would be a simple solution that would largely come from the pockets of the county’s 5 million visitors a year, not its 80,000-plus residents. He said that during the Covid shutdown, sales tax revenue fell 67% with no visitors, so he estimated that the revenue would be generated by tourists.
There’s been one hurdle to the county’s plan to hike the sales tax: Tallahassee lawmakers said no. Because Monroe is currently a non-charter form of government, state leaders can effectively veto such moves.
Gastesi said the state did not approve a plan to raise sales taxes in Monroe, and it also turned down the county’s proposal to put the decision in front of voters as a referendum on next year’s ballot.
So now, Monroe officials are working on a plan that would allow them to put whatever they want on their ballot, starting with the resilience sales tax. To do that, however, they have to persuade voters to agree to shift from the current form of government, where the state has the top say, to a charter county, which is essentially a more direct democracy.
Twenty of the state’s 67 counties are “home rule” or charter counties, including Miami-Dade, Pinellas, Orange and Duval.
Monroe County commissioners have already directed the county attorney to start drafting the language for a new county charter, and they hope to have it on the ballot next November. If it passes, then Monroe can ask voters about raising taxes two years later, in 2026.
It’s not a slam-dunk strategy, though. Residents would still have to decide to tax themselves, a proposal that garnered some pushback at a county meeting last month on the topic, both from residents and commissioners.
“Tourists may pay some part of it but you’re raising my taxes as well,” Islamorada resident Patrick Foley said, Keys Weekly reported.
The county has yet to conduct any polling on the issue, but Rhonda Haag, Monroe’s chief resilience officer, said she considers a new sales tax a crucial step forward in the county’s adaptation plans.
“If we don’t get that, our resilience program is going to come to a halt because we don’t have the cash stash to pay for it. We just don’t,” she said.
In the meantime, federal and state grants are keeping the county’s resilience plan afloat. And so are proceeds from property taxes, the main form of income for Florida municipalities. But that might not always be the case. Several studies predict that as coastal properties flood more often, their value could drop as the cost to insure them rises.
That would be a huge problem for Florida, where property taxes make up the lion’s share of many county or city budgets. In a state without income tax, the perpetual growth of property values and the tax revenue generated by the increase are what foots the bill for police, fire, parks, trash pickup and other essential city services, including the adaptation projects that are designed to keep communities dry as sea level rise.
If property values begin to drop from sea level rise-driven inundation or even the increasing threat of it, that’s bad news for the Sunshine State.
A recent study published in the Journal of the American Planning Association by researchers from Cornell University and Florida State University found that the average municipality in Florida could see sea level rise-driven flooding potentially impact the value, and therefore, the collection of taxes, for almost half of its properties. That could put those municipalities at risk of losing about 45% of its property taxes and 29% of municipal revenues by the end of the century. That number rises sharply for municipalities in more at-risk areas like South Florida, where some spots could see up to 90% of their property taxes at risk. That could force more tax hikes to compensate.
Linda Shi, an assistant professor in the department of city and regional planning at Cornell and co-author of the study, called this a “Catch-22” for Florida’s coastal communities.
“Many of these places are highly reliant on these sources of revenue, and they’re reliant on these sources of revenue to fund the adaptations they’re doing,” she said.
Florida governments also rely heavily on charges for things like parking and marinas, as well as fees on developers. Those weren’t included in the paper’s analysis, which Shi called a “back of the envelope estimate” based on 2012 census data.
“If half of your city is standing in water, you’re also not going to be able to get money for those things,” she said. “If we say the city could lose 50% of its revenue to the impacts of sea level rise… Its actual fiscal impacts are going to be much bigger.”
Hagg said the county is acutely aware of the risk of falling property values due to flooding, but it hasn’t seen it happen yet, even in neighborhoods that flood for 90 days of the year.
“That’s the whole point of our resilience program, to maintain access to homes. But the main goal is to maintain our property values,” she said.
It’s a similar story in Miami Beach, another island community with billions of real estate facing sea level rise-driven inundation. Studies consistently single out Miami Beach as one of the U.S. communities first in line to see a potential property value drop off as flooding becomes more common, but Amy Knowles, the city’s chief resilience officer, said the city has done a lot to prepare for the risk.
The city has sunk tens of millions into raising roads and improving drainage in neighborhoods like Sunset Harbour, West Avenue and Palm and Hibiscus Islands. The projects have been controversial with some residents, but Knowles said a city-funded study also found that they improved property values in neighborhoods near the fixes.
“Our focus on resilience projects and investments is because we understand that connection between property value and sea level rise. It really spurs us to invest and to do this work,” she said.
And while the city isn’t seeking a dedicated funding source for resilience money like Monroe, Knowles said Miami Beach’s budget is less reliant on property taxes than other, smaller coastal Florida spots. The city has strong reserves, a booming tourism economy and plenty of residents that don’t live here full-time, so their homes can be taxed at a higher rate than homesteaded properties, she said.
“We are highly vulnerable but highly valuable and we know we have to invest,” she said. “We’re constantly going to be incrementally adapting to this challenge.”