GOOD BAD GOOD NEWS

There is good news, bad news and good news on the tax front this week which makes blogging about it easy.  I can start with the good news, sneak in a little bad news, then finish with the good news--kind of like sneaking a really bitter pill in the middle of an Oreo cookie.

First, the good news.  For the homesteaded property owners of Clay County, Green Cove Springs, Orange Park, Keystone Heights, and Penny Farms, the Florida Legislature passed statutory tax reform in the form of House Bill 1B and approved Senate Bill 4B for consideration by the voters in January 2008.  To comply with the provisions of HB1, the Clay County BCC voted unanimously to reduce their millage from $8.7 per $1000 valuation to $7.00 per $1000.  For the municipalities (Keystone Heights, Penny Farms, Orange Park, and Green Cove Springs) the County also approved the creation of a “negative” Municipal Services Taxing Unit (MSTU) which will further cut the millage rate for municipal taxpayers.  In Green Cove Springs the millage reduction is expected to be an additional $2.50 per $1000 valuation and in Orange Park the reduction is expected to be an additional $3.03 per $1000 valuation.  For a homesteaded Green Cove Springs family living in a $225,000 home, this amounts to an annual savings of $840 on your tax bill.   If the Constitutional Amendment passes in January, the savings could be as high as $1500 per year.  That’s good money.

Before you jump up and down yelling “yeah for the Florida Legislature and hoorah for the BCC”, let me inform you of a couple of things.  First, before the Legislature mandated lowering your County and City property taxes, they passed legislation that raised the amount of property taxes taken by the State to pay for whatever it is they do in Tallahassee.  How courageous!  They didn’t exactly share the pain of reducing the size of State government. 

Second, the BCC really didn’t reduce the municipal millage out of the County pockets.  The BCC paid for those millage reductions with money collected from municipal taxpayers for services the County doesn’t provide within the City or Town limits.   Orange Park taxpayers pay for their own Fire protection.  They also pay their share of fire protection for families living in the unincorporated area of the County.  Green Cove Springs and Orange Park taxpayers pay for their own Police protection.  They also pay their share of police protection for families living in the unincorporated area of the County.  Clay County has been (more or less) fair about this since they got sued by Orange Park for double taxation.  Every year the Town and City Managers crawled begging to the County Manager and the BCC to get back some of that money in the form of an “Interlocal Agreement”.  It was a terrible system.  The proposed MSTU system is much more transparent.  Hat’s off to Commissioner “Can-do” Bradley and the rest of the BCC for getting this passed.

Which brings us to the bad news.  The problem with the MSTU system is that the County Manager waited until this year to propose the system.  Coming on the heels of House Bill 1B, the municipalities are suddenly caught short on their ability to raise adequate funds to support necessary municipal services.  In Green Cove Springs, the City would have to nearly double its ad valorem rate from $2.60 per $1000 valuation to $5.10 per $1000 to make up for the money that City taxpayers have been paying to the County for services that aren’t provided by the County.   Under the Legislature’s tax bill, increasing the millage rate could not be allowed without a vote of the people.

Municipal services are necessary.  Police protection in Green Cove Springs is a case in point.  Sheriff Beseler houses lots of felons in his facility on Orange Avenue in Green Cove Springs.  He periodically lets these folks out the back door onto Palmetto Avenue.  Its not the Sheriff’s fault.  In this State and in this Country we have these “Make Nice to Felons” laws that force the CCSO to release felons when conditions get a little crowded and not so comfy for the residents.  Very often when they leave, the felons don’t make nice to the people of Green Cove Springs and Police Chief Musco has to expend very valuable police assets to round them back up and lock them up again on Orange Avenue.  Its an expensive and very stupid system.  From a budget standpoint it makes more sense to increase the Police Department’s ammunition budget and be done with it.  But that’s a different story.

So the bad news is that less municipal services will be provided; the State government will have more money to make more rules to raise the cost of doing business in the State; and the Tax Reform we have been waiting for will last less than 10 years before we experience the same inequities in taxation that we experienced in 2006.  This tax reform effort did not take care of high property taxes on business property.  This tax reform effort did not address the inequities inherent in taxing people on the value of real property when the “just” value of one family’s home is grossly taxed more than the “just” value of another family home that has been homesteaded longer.   Governor Crist gave North Florida a lousy package of “tax reform” that took care of his South Florida buddies.  This is no more “tax reform” than his “wind insurance” reform package, which supposedly saved the availability of wind insurance in Florida by declaring that we would have no major hurricanes in Florida for the next two years.  Brilliant!  Blame me, I voted for the guy.

The good news is that we are, at least for the present, keeping money in the family budgets of Florida homeowners.  Hopefully, it will force our City Managers, County Managers, County Commissioners, and City/Town Councilpersons to carefully prioritize their expenditures.  If this happens, and if the Clay County municipalities can somehow survive financially, it could be the best good news that we get out of the whole Tax Reform deal.