Monroe County Commissioner Heather Carruthers is pushing the Emergency Sales Surtax (ESS). It looks to be another dishonest money grab. Just like the wastewater projects. In this case, the county is looking to take advantage of the taxpayers over a life-health-safety issue. They’ve hit a new low and the spin machine is fully engaged.
In order to further the proposal, county staff has made some preposterous arguments to support it. For instance, they claim that zero property tax is paid by tourists when in fact, there are thousands of properties in the Keys that derive most, if not all, of their income from tourists. They claim that local families will only pay an additional $125 per year in sales tax, when the math clearly supports a number around $417. In fact, information from a variety of sources corroborates the higher number. Staff is none too pleased when asked to explain the inconsistencies. Neither are the commissioners.
That’s the operating environment we find ourselves in with Carruthers’s new sales tax. It is highly suspect to say the least.
The pitch is that this tax will ease the burden on the locals and place more of it on tourists. This does not hold true for Key West locals. Not only will your typical Key West homeowner kick in an additional $130 per year, but Key West has a very high population of renters – much higher than the county average. These households will not benefit at all from the property tax reduction and will kick in the whole $417 for the additional sales tax.
So if this shift isn’t about locals, what is it about?
In these situations, its always worthwhile to figure out what’s going on in the background. Who benefits? Carruthers proposed this “tax shift” and sponsored the agenda item containing lots of questionable information to support it. Looking at how Carruthers and some of her campaign donors might benefit would be a logical place to start. We’re not talking about big money here, but it is interesting to note that half the contributions came from the lodging industry. Those contributions covered the cost of her campaign plus a little extra.
It stands to reason that the lodging industry would gain the most from Carruthers’s proposed tax “shift”. For one thing, the twenty highest value properties in the Keys are nearly all hotels and timeshares. Nearly all are owned by people who reside outside of the Keys. In other words, the “shift” would ensure that out-of-county property owners pay nothing for fire protection service. This includes me by the way. I’m a property owner who lives away. I contribute virtually nothing to the local sales tax. I would save $78 every year. Enough for a lift ticket and maybe a beer or two. If the taxpayers would be kind enough to do that for me, I won’t object. But I’d just as soon they keep their money and spend it on their own families.
First up is Julia Fondriest. Ms. Fondriest is currently named as an officer in the famous 3406 North Roosevelt Boulevard entity behind the Tourist Development Council (TDC). She also owns several tourist-oriented properties in the Keys, and appears to live locally. How would this tax “shift” affect Ms. Fondriest?
According to the Monroe County Property Appraiser (MCPA), there are four properties with Julia Fondriest named as the owner. The taxable value of those four properties combined was about $1.6 million in 2014. Three are located in Key West and one is located in Big Pine. Big Pine is located within the Cudjoe Regional service area, so Ms. Fondriest came out way ahead on the sewer project, thanks to the taxpayers. She’ll pay $4,500 per EDU for a project that actually costs around $22,100 per EDU. That’s a huge $17,600 subsidy. The taxpayers have certainly been generous. If Carruthers has her way, they’ll be even more generous going forward.
According to Sunbiz.org, Ms. Fondriest is a named officer in another five business properties in Key West. All told, Ms. Fondriest has a personal and/or business stake in property with a combined taxable value of over $18 million. Under Carruthers’s scheme, these properties will save over $26,000 per year on property tax. Since Fondriest does appear to live in the Keys, she will kick in another $417 per year through the new Emergency Services Surtax – which barely amounts to a rounding error in the scheme of things. That’s a net savings of around $25,700 per year.
Next up is Jon Allen. Mr. Allen is also the man behind Hildenborough Hotels. Allen donated $500 to Carruthers’s campaign as an individual and another $500 through Hildenborough Hotels.
Mr. Allen does not appear to be a full-time resident of the Keys. It’s impossible to say how much time he spends here, but for discussion purposes let’s assume his contribution to the sales tax is negligible. In other words, there is nothing to suggest that Mr. Allen should be considered a local. Under that scenario, Mr. Allen will contribute zero dollars to the sales tax.
The properties owned by Mr. Allen and his company, Hildenborough Hotels have a combined taxable value of $13.2 million. If Carruthers is able to push her ESS tax shifting scheme through, Mr. Allen will save almost $19,000 per year.
What about Carruthers herself? How will this tax “shift” affect her? The taxable value of her primary residence is about $1.5 million. This “shift” will save her about $2,200 per year. I know she’s a big spender when it comes to taxpayer money. I’ll assume she’s not as careless with her own. Let’s say that she spends an additional $417 in sales tax. That’s a net benefit of almost $1,800 per year. Nice.
Here’s all that information in tabular form.
There’s nothing wrong with having an honest discussion about who pays for fire service and how. Unfortunately, that is not what’s happening here. I really dislike that misleading information is being used to support it. A closer look suggests that this self-serving “tax shift” isn’t about the locals at all. With all the hand-wringing over how unaffordable the Keys has become for the local workforce, Carruthers’s proposal seems all the more out-of-place.