The Board of County Commissioners (BOCC) is considering an additional sales tax to pay for fire service. The proposal has been put forward by commissioner Heather Carruthers, who likes to call it a tax “shift”.
Here is the county’s story: the county will impose the additional sales tax which will enable them to lower property taxes. The standard line is that 60% of the sales tax is paid for by tourists, which would theoretically reduce the contribution needed from the locals. In fact, the law requires that ad valorem taxes be offset by the amount of emergency services tax collected.
There’s been some disingenuous talk of using any “excess” tax collected to fund human service activities, which is not currently allowed by state law. Because a change would have state-wide impact, I doubt very much the law could be altered. It would certainly be an uphill battle. That bit is empty rhetoric meant to make the proposal more attractive to certain voters. I hope they don’t fall for it.
Here’s an excerpt from the 2015 Local Government Financial Handbook. More information about the emergency services surtax can be found on page 195.
Local government entities receiving any share of the surtax proceeds will be required to reduce ad valorem taxes by the amount of revenue projected from surtax collections. If the surtax raises more revenue than the amount that would reduce the millage rate to zero, the funds will then be applied to non-ad valorem assessments by the entity, with any excess surtax proceeds transferred to the county to reduce the county’s millage rate.
It’s important to keep in mind Carruthers’s track record of diverting and squandering tax payer money. She approved every single spending increase on the Cudjoe Regional project – $43 million so far, with another $6 million coming at the January 20 BOCC meeting. It’s not the taxpayers who benefit. This wasted tax money didn’t buy a bigger or “better” system. It simply flowed into the pockets of the contractors and subcontractors at the expense of the taxpayers.
Back in 2012, the county was desperate for the infrastructure sales tax extension to pass. They were so desperate, they actually promised to use sales tax money to ensure funding parity for Key Largo. Well, here we are going on four years later. Key Largo hasn’t seen a dime for that purpose.
What actually happened is that the county went on a wild spending spree in Cudjoe Regional. The initial bid cost of the project was $147 million. Assuming the additional $6 million passes, the cost will skyrocket to $196 million. There was also an assessment reduction, which pushed another $10 million onto county-wide taxpayers. Carruthers supported all of this. Presumably, this additional emergency services tax is a vehicle for the same sort of thing.
Needless to say I’m very pleased to see leaders from other entities being skeptical and asking smart questions.
Let’s take a look and see how this tax, if implemented, might actually impact the taxpayers.
- It’s another sales tax – a regressive tax which disproportionately affects lower and moderate income households. The BOCC has made its contempt for lower and moderate income families very clear through its inequitable wastewater funding policies. In fact, the county’s own analysis shows an increased sales tax burden of $125 per year for an average family in the Keys. All of these financial burdens add up to push small business owners and working families out of the Keys. There is evidence that the BOCC’s absurd policies are already starting to backfire and ultimately reduce the amount of revenue the local economy in Key Largo will be able to generate.
- Certain county officials like to pretend that the sales tax is the only way to get tourists to contribute tax-wise. That, of course, is blatantly false. There are the tourism taxes, of course, but tourists contribute to property taxes as well. There are plenty of properties in the Keys that cater to tourists. There are numerous residential properties that are occupied by vacationers and seasonal visitors. In fact, locals who own a primary residence may take advantage of the homestead exemption. Locals don’t get any such break on the sales tax. It is telling that the county hasn’t even analyzed this aspect.
- The emergency services surtax is allocated to the various entities based on how much they spend. That means that an entity like Monroe County, who is careless and wasteful with taxpayer money, will be rewarded in the allocation. More responsible entities will be punished with less funding. This is probably why this option is appealing to someone like Carruthers, who has a solid track record of squandering taxpayer money in a grossly unfair manner.
More analysis to follow. Please stay tuned.