I’ve spilled lots of ink on this Emergency Services Surtax (ESS). There’s a good reason for that. The true impact of this proposed tax has been misrepresented to the public. (More monkey math!) People need to know the real deal. The ESS is being sold as a “tax shift”. According to the spin, tourists pay nothing for fire and rescue services. Locals pay for it all. The way to “fix” that is to pay for those services with a sales tax rather than a property tax. To hear the county talk, this “tax shift” is all about helping locals.
In order to support Comm. Heather Carruthers’s proposal, county staff has made some demonstrably false claims.
- Locals currently pay 100% of property taxes, tourists pay 0%. Yes, that statement was actually made in the county’s “white paper“. We know that’s not true, of course. There are thousands of properties in the Keys that derive most, if not all, their income from tourists. Hotels, timeshares, seasonal homes, vacation rentals. There are many more that derive at least part of their income from tourists. Attractions, bars, restaurants. I estimate that locals actually pay about 47% of property taxes.
- Local families will only pay $125 more per year in sales tax. This is mathematically impossible using the county’s own numbers. The math supports a number between $417 and $486. Outside data supports a number between $400 and $500.
Rather than addressing these issues in a forthright manner, county staff has chosen to argue and stonewall. This is a very bad sign. The public is being lied to again. There is no doubt that certain folks will benefit, but it’s definitely not who the county says it is.
There are other instances of “monkey math” as well. For example, the benefit to the taxpayers in Islamorada, Marathon and Key Colony Beach has been exaggerated. There’s something weird happening with Key West’s numbers, too. But I haven’t been able to completely nail down what’s going on there yet. In any case, Key West certainly is not going to benefit from this “tax shift” either.
There’s going to be a break-even point where the property tax saved is going to exceed the additional amount of sales tax paid. That point will vary depending on what a given property currently pays for fire and rescue service. Here is that information in tabular form.
Exactly how many homesteaded properties are going to benefit from Carruthers’s proposed “tax shift”? It’s definitely not everyone. It’s not even most.
Only about 37% of local homeowners will benefit. If you’re a renter, you’ll kick in the entire $417 in additional sales tax. This is especially true in Key West and Stock Island, which have the highest percentage of renters in Monroe County by far. See below.
Note that the total number of occupied households has declined since the 2010 Census. The price of housing is one factor pushing people out of the Keys. It is inevitable that the county’s foolish over-spending will result in a higher tax burden. That’s certainly another factor. Key Largo is especially hard hit at the moment and it’s economy is showing signs of strain.
Key Largo is the canary in the coal mine. But it’s getting to the point where the county’s lack of responsibility will affect everyone Keyswide. By targeting Key Largo, the BOCC has damaged the second largest sales tax generating area in the Keys. And now it looks like they intend to inflict further damage with Carruthers’s “tax shift”. Once again, Key Largo is especially hard hit. But this time Key West is right in there, too. This isn’t good for anyone really. The county is combining unsustainable spending levels with the counter-productive tax/funding policies. Where does this leave the taxpayers?
Kolhage has talked about the “well running dry” in reference to the taxpayers. But he doesn’t walk the walk. He was and still is a huge proponent of out-of-control spending on Cudjoe Regional. He’s been silent on the wastewater funding disparity. I guess he thinks state money is just going to magically appear and bail him out? As of now, it looks like the state has other ideas. Unfortunately, Kolhage is not alone in this fantasy. The entire BOCC seems equally as delusional.
Let’s use some round numbers to put the effects of this “tax shift” all together for local households. Numbers from 2010 peg the number of households in the Keys at 32,686. Numbers from 2013 place the number at 27,955. Assuming there are roughly 30,000 households in the Keys, the numbers look like this.
- Number of owner-occupied properties: 30,000 x 60% = 18,000
- Numbers of owner-occupied properties that will benefit: 18,000 x 37% = 6,700
- Owner-occupied properties who pay more: 18,000 – 6,700 = 11,300
- Number of renter-occupied properties: 12,000
- Number of local households that will pay more: 11,300 + 12,000 = 23,300 or 78%
So an estimated 78% of local households will actually pay more as a result of Carruthers’s proposed “tax shift”. If Carruthers wants to have an honest conversation about how to pay for fire and emergency services, that’s fine. But false information and misleading claims have no place in that conversation.