I would like to have a discussion with my colleagues regarding the downward trends the City is seeing in its resort tax revenue collections and in the City’s full-time resident population, along with a preliminary discussion on what steps we can take to reverse and otherwise address these concerns.

Resort taxes are a primary source of revenue for the City of Miami Beach (approximately 12%). As recent years have demonstrated, such heavy reliance on tourism comes with risk. Below is a snapshot of tourism revenues over the past 5 fiscal years:

2018-2019 - $88,576,819
2019-2020- $57,045,903
2020-2021 - $79,264,972
2021-2022 - $116,424,147
2022-2023 - $113,865,787

Resort tax revenues took a steep dive in the 2020 fiscal year due to the COVID-19 pandemic. While these revenues recovered over the next two fiscal years, Miami Beach saw a modest (2%), yet not insubstantial ($2.6M), decrease in the 2022 fiscal year. A continuation of this trend would be troubling and could, over the long term, have a material adverse impact our budget, and consequently, the level of services and scope of infrastructure, resiliency and other capital projects.

Although it can be reasonably anticipated that the tourism and hospitality sectors will continue to be primary drivers of our local economy for the foreseeable future, the city’s efforts to diversify its economy by taking concrete steps to attract other industries, including technology and financial services, must continue and be further enhanced. Diversifying our economy not only makes good fiscal sense, but moving our focus and marketing efforts away from tourism and toward “low-impact” industries, we could also have a positive impact on quality of life issues that are so important to our residents.

Another data point that is concerning is the decline in the number of full-time residents in Miami Beach. The city’s population peaked in 2017 with approximately 92,187 full-time residents. Based on data for 2022, the most recent year for which data is available, Miami Bach’s population has declined by nearly 15% to approximately 80,017. Although some may see this as good news – a lower population may mean less congestion – if the trend continues, it will hurt small local businesses that rely not only on tourists, but on residents, to thrive and, in some cases, to survive. As we have seen in certain areas in our city, when businesses fail and new businesses do not quickly fill available commercial spaces, storefronts are “boarded” up – in some cases for prolonged periods – bringing visual blight and associated problems.

Even with a decreasing population, Miami Beach, along with the rest of Miami-Dade County, is experiencing a housing crisis. The lack of sufficient workforce and affordable housing is not a new subject. If we don’t address it in a more impactful manner, our city’s population will continue to a decline and the traffic congestion on the causeways to and from our island-city as well as our streets is unlikely to improve. I believe the city should double down on efforts to incentivize the development of workforce and affordable housing.
I would like to hear my colleagues’ thoughts and ideas on the above issues.

The City’s Chief Financial Officer and the acting Director of the Economic Development Department should be prepared to participate in this discussion.