Less than a decade ago, Miami’s inner city was mangy. The tropical city could have become the next Detroit.
When businesses, law firms, and government offices downtown closed, few people remained in its seedy core, fleeing to suburban Miami-Dade and Broward counties for their gated, manicured subdivisions and soccer fields, or to the glamorous nightlife across the causeway in sleek South Beach.
But that’s all changed. Miami is booming again. Construction cranes dot the skyline as a new wave of baby boomers, international residents, and businesses converge on the city.
Call it the tale of two cities: Detroit sought to fix its urban blight with high taxes, heavy regulation, and big salaries and pensions for government employees.
Much of the credit for the transformation of Miami falls to the city’s mayor, Tomas Regalado, who decided to take his city on the opposite path, one of lower taxes and economic growth.
Regalado, a Republican born in Havana, Cuba, was elected mayor in 2009 and soon after, set out on an ambitious path of improving city finances, cutting taxes, and welcoming new businesses with a regulation overhaul.
He is running for re-election this November.
“This coming budget, we are proposing to reduce taxes, maintain the level of services, and hire more police officers. Why? Because property values are coming back,” Regalado told Newsmax TV.
After forcing concessions from city workers, there is room in the budget for tax cuts, he said. And following a series of lawsuits from public unions that ended in the city’s favor, Regalado was also able to trim Miami’s budget without eliminating jobs.
City employees making more than $40,000 saw salary cuts, but those earning less did not have to share the pain. The plan kept all city workers employed as the city implemented tough reforms.
“I didn’t want to kill a city to save a government,” Regalado said, defending his choices, which included slicing his own salary by 36 percent.
“We broke all the contracts with the union, created [new] contracts with salary reductions, and capped the pensions at $100,000, because in the city of Miami, you had [young] people retiring with $150,000, $140,000 per year for life. [In Miami] … firefighters and police officers retired young,” Regalado, a former broadcast journalist, says of the bitter fight and lawsuit he weathered.
He said topping pensions at $100,000 helped to “reduce the deficit and taxes. The reason I proposed to reduce taxes was because the foreclosures were affecting Miami. Miami was ground zero,” Regalado said.
“I thought that by reducing taxes, you would bring new investment into the city of Miami and it happened. People are moving back. The message is very clear: You reduce taxes, people will come because it’s a good investment.”
Regalado also cited tax enterprise zones and Business Improvement Districts — where business people in a geographic area tax themselves and decide which projects to fund — as programs that helped turn the city around.
Today, the city once known for its “vice” in a hit TV show now reflects Regalado’s opportunistic message: chic high-rise condos, an emerging crop of world-class restaurants, high-end hotels, a growing expanse of luxury retail stores, and a burgeoning cultural scene.