The Palm Beach County Commission withdrew consideration of a half-cent local government infrastructure sales tax referendum Tuesday after the School District of Palm Beach County backed out of participating.
County Administrator Bob Weisman said his staff had revised the item from the previous week to seek direction from the commission after the school board withdrew.
“I had a recommendation for approval of the potential sales surtax with the idea that we might be able to work with the school board and present a comprehensive plan to the public for how the funds would be used,” Weisman said. “The school board withdrew from consideration last week, and we were left with an option of proceeding with our municipalities.”
The statute authorizing the tax allows a split of about 60-40 by population between the county and the cities. “The recommendation before you is requesting board direction and reflects the change in situation from last week,” he said.
Commissioners heard the proposal a year ago and were lukewarm to the idea, asking staff to come back this year for consideration on the November 2014 ballot.
“The nature of the things we would spend this money on is probably part of the problem,” Weisman said. “We’ve been very successful in the past when we could describe big-picture expenditures to the public. A lot of these things we’re talking about are not of that nature. They’re important, but they involve rehabilitation, small projects and things that we may not have money for.”
Another issue is that the municipalities vary greatly in their need for financial help.
“This is a multiyear process to even get this approved, and the cities certainly have needs. I’m certain you’re going to hear from Belle Glade today about all their needs, but not all the cities are on board,” Weisman said.
Making the issue more complex is that other referendums involving money will be on the November ballot, including the school district’s proposed continuation of its 0.25 mill property tax for cultural arts education. “That’s currently a fee they have now, and they’re probably going to seek renewal of that,” he said.
The Children’s Services Council is also expected to ask to have its tax structure renewed.
Weisman noted that many Florida counties have a half-cent or one-cent surtax for specific purposes. “We are one of the few that doesn’t,” he said. “Somewhere down the road, the board is going to have to deal with this, but I’m not prepared to make a recommendation to you today, mainly because of the indecision regarding the school board and the likelihood that there will be other ballot issues in November that will conflict the voters.”
Acreage resident Anne Kuhl characterized the proposal as “double taxation” for property owners. “Every time they buy something, you’re going to have to pay a half-cent plus whatever taxes you were paying to begin with,” she said. “The other issue would be that when our property taxes go up, the county collects more revenue.”
Daniel Martell, president and CEO of the Economic Council of Palm Beach County, agreed with many of Weisman’s comments. “The Economic Council is focused on a return on investments for public policy matters,” he said. “This is precisely one of those situations where we’re going to want to know what the return on investment is for the taxpayers on an item like this.”
Martell pointed out that in 2004, the school district successfully created a targeted campaign to raise money through a sales tax for the construction of new schools. “It was a win-win for everyone in the community,” he said. “This seems to be a little bit of everything, and it is hard to determine what that return on investment could be.”
He suggested that the county and community stakeholders discuss a plan that is more precise, such as roads or beaches.
John Borland, representing the Palm Beach Civic Association, said the sales tax proposal represents a tax increase of about $110 million annually.
“While there is some efficiency in creating a revenue source from tourists and other visitors to Palm Beach County, as well as renters, rather than simply from property owners, there needs to be a corresponding offset to the millage rate so that it doesn’t become a pure tax increase,” Borland said. “We also find the list of projects to be extraordinarily broad, and there is a danger going forward that it becomes a wish list for spending projects.”
Commissioner Jess Santamaria said he opposed the tax proposal because earlier this year, the commission gave up about $69 million in impact fees that was supposed to be set aside for schools, roads and parks. “We cannot give away impact fees because somebody is going to have to make up for it at a later date, and that’s what we’re facing today,” Santamaria said. “That’s why I cannot support the way this thing is proposed.”
Commissioner Shelley Vana noted that Florida is a low-tax state. “Our problem with our taxes is that they are inequitable,” she said. “The property owner pays a tremendous amount of property taxes. The businesses pay a tremendous amount of commercial property taxes, so the burden of most of our tax goes to the individual property owners.”
Vana said commissioners should work with business leaders to come up with a plan that’s more targeted, pointing out that they recently had balanced the budget in large part by sacrificing road construction.
“The thing that really impacts every single person is our roads, and again, it affects the business person and the property owner. My direction would be to get the business community on board, because I’ve heard from them fairly clearly,” she said, pointing out that it would be a waste to put a question on the ballot and have it fail.
Commissioner Steven Abrams agreed, saying that the tax proposal is not an opportunity if voters will not pass it. “Clearly, what has been put before us is too broad,” he said.
Commissioner Mary Lou Berger agreed with most of Vana’s comments. “Perhaps we need to refocus our energy to get something done, and I agree that infrastructure is the most important,” she said.
Mayor Priscilla Taylor agreed that infrastructure plays a large part in the health of any government and said she would support a proposal based on infrastructure improvements. “When we think about Palm Beach County, what we say we are and who we say we are, I don’t think that a half-penny or whatever would matter that much into investing in the future,” she said.
Vana made a motion to continue working with the business community and develop a more specific plan, which carried 4-3 with Abrams, Vice Mayor Paulette Burdick and Commissioner Hal Valeche opposed.