St. Johns County government operates substantially on the taxes and fees collected from residents, property and business owners who are located or invested here. No taxpayer wants those real costs to be lower than me.
Never more than the past few years has there been pressure on elected officials to do more with less. County employees have taken unpaid furloughs, gone without pay raises and positions for certain employees who retire are not being re-hired.
We have also put well intended pressure on our state legislators to understand our feelings in this lousy economy. In January 2008, voters approved an amendment to our state Constitution that doubled the homestead exemption for homeowners. We created “portability” for the Save Our Homes tax break when we move and put a cap on tax assessments — even for non-homestead property.
The recession has resulted in a big drop in property values. So overall, Florida’s cities and counties have had less money to operate on.
When Dennis Hollingsworth sent out our tax bills this year, many of us saw a welcomed reduction; maybe a few hundred dollars or more, while some tax bills actually went up slightly.
Keeping with the “lower our taxes” theme, there is a lesser-known law that was passed in 2007 that is only now taking full effect. From this year on, a Florida city or county cannot increase taxes by more than the rate of increase in Florida’s per capita personal income.
The logic in the legislature was that taxes should not go up faster than Floridians’ income. Makes a lot of sense, right? Maybe, but, maybe we have painted ourselves into a corner that may cause us more harm than good.
Certainly, in the short term, property values in St. Johns County will continue to drop. Since we have capped tax assessments, even for non-homestead property, the only option for local governments may be to raise tax rates (millage) to be able to continue to pay the bills.
So, you might say, “this is only temporary until the economy improves.” Wrong. This new tax cap means that the cuts of recent years are permanent and will not be recovered. There is one loophole. Local governments can exceed the cap by a super-majority vote, or in extreme cases, in an election. But given the political climate, it seems unlikely.
There’s at least one other thing to consider. Costs like insurance, pensions and health care will likely grow faster than the established cap. How long do you think police, firefighters and other civil servants are going to be willing to go without a pay raise?
So, here we sit. The state constitution mandates that property assessments be lowered, exemptions be increased and made portable. The state legislature has mandated that taxes not increase more than Florida’s per capita personal income — which may actually decrease over the next few years.
Don’t you love un-funded mandates from Tallahassee?
I predict that city and county management will be forced to stop spending on non-essentials and reduce spending on essentials for public safety, but, this won’t be an invisible approach. I foresee four-day work weeks, more scrutiny to repair rather than replace, department buyers breaking old habits and buying more generic, lower cost equivalents where practical. Like many large, public organizations, we are heavy with middle management who tend to be senior employees, highly paid and hard to layoff, but, more layoffs are inevitable.
We’ve painted the floor with these tax reducing policies, but, I’m concerned that we are at risk of going too far and not leaving ourselves a path out of the corner.