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It’s Raining Taxes, Cont’d: Behind Scenes, County Manager Floats Sales Tax Increase

| September 1, 2010

flagler county administrator craig coffey

Dealmaker: Flagler County Administrator Craig Coffey. (© FlaglerLive)

You haven’t heard about this. Flagler County commissioners have. So have Palm Coast City Council members. So have the county’s city executives. It’s County Manager Craig Coffey’s plan for a half-cent  sales tax increase. Coffey is circulating the policy initiative to elected officials and city managers. It’s been discussed stealthily since mid-August, without prior official action by either the county commission or the Palm Coast city council.

The tax plan would raise about $3.8 million a year and would finance the development of an industrial park at the county airport as well as, possibly, an industrial park in Palm Coast. The plan would be an alternative to the property tax increase Enterprise Flagler—the public-private economic development partnership—is proposing in a referendum on November’s ballot. That proposal would raise the property tax by 25 cents per $1,000 in taxable value. The proposal faces stiff opposition. (It’s getting its official unveiling Thursday, some three months after Enterprise Flagler and the Flagler County Chamber of Commerce, its only chief sponsor, unveiled it to local government boards.)

“There has been some recent discussion regarding sales tax as a potential alternative solution to the currently balloted referendum measure to fund an increased amount of economic activity,” Coffey wrote in an Aug. 16 memo to county commissioners. Coffey doesn’t say who has discussed the proposal or who instigated it. “I will hope to provide the board with information on these options,” he wrote.

Coffey is floating two sales tax options and soliciting ideas, at least internally. One would be implemented without voter approval, through a “supermajority” vote of the county commission (that is, with at least four of the commission’s five members approving it). If approved in September, revenue could start coming in by January. But the revenue could not be leveraged to finance bonds and raise still more revenue through debt. For that, the initiative would have to be approved by voters in a referendum.

The second option would be similar to an existing half-cent infrastructure sales tax voters approved in 2002. That tax doesn’t come up for renewal until 2012. Voters approved it because they identified with immediate, visible improvements to roads and other infrastructure. They likely would not approve it as readily if it was tied—as the ballot language would have to tie it—to “economic development” absent clearer plans that show benefits of such a tax-and-build approach. Coffey is not pushing that approach as much as he is the so-called “small county surtax” enacted by a supermajority vote, bypassing voters.

Coffey’s sales tax proposal is only part of another plan that has yet to gain the commission’s approval—the development of an “airport commerce park” at the county airport. That would be the same county airport currently leaden down by several white elephants (and one expensive road) the county built at public expense for private industry only to be left holding the bag after those companies (such as Ginn Co. and Cakes Across America) bailed.

Coffey obliquely referred to that plan during an Enterprise Flagler meeting last week, when Enterprise Flagler was getting its first look at the property tax referendum proposal. “One industrial park is not going to solve our situation,” Coffey said, saying the airport could provide one component to developing industries that could then relocate more permanently, either at the airport or elsewhere.

Palm Coast is cool to critical of the Enterprise Flagler referendum because its $2 million-a-year proceeds would be administered by the county, and would likely pay for industrial construction on county property (such as the airport). “I’ve heard that Palm Coast is unhappy with the quarter-mill,” County Commissioner Alan Peterson said, referring to the property tax proposal, “because there’s some feeling among some Palm Coasters that they won’t get any benefit from this.”

Coffey’s sales-tax proposal would almost double the revenue of Enterprise Flagler’s approach, and, as he describes it in a memo to city officials, would be shared so that Palm Coast and the county would both eventually get their industrial parks.

Here’s how Coffey put it in his memo to city officials:

An example would be, the county would receive $1 million per year from the city for each of the first three years (years 1, 2, and 3) for use on capital building/infrastructure improvements at the airport. The expenditure shall be specifically related to the South Airport Industrial Park, creating an industrial incubator building greater than 50K, and the entrance parcel to the Airport for the economic development.

Then, the city would receive $1 million per year from the county the following three years (years 4,5,6) for use by the city to create a Class A industrial park or investment with the private sector on industrial

buildings in its park or some other plan that the city would be willing to incorporate in the agreement.

This would leave the County and City each with $200,000 -$300,000 to do other economic efforts/collaborations on their own or in conjunction with others. Should the county discontinue or otherwise be unable to implement the surtax before contribute equal monies back to the City of Palm Coast, the county shall bear the obligation to repay the City these funds.

The sales tax proposal isn’t likely to fly—not this late in the season, and not when placed in the context of a series of tax proposals being made or on the horizon.

Enterprise Flagler’s tax initiative is already competing with another 25-cent-per$1,000 initiative placed on the ballot by the school board, although that initiative is a continuation of tax revenue, not an addition. The Tourist Development Council just recommended an increase to 4 percent of the bed tax assessed on hotel and motel room rates, campground rates and any dwelling rented for less than six months. That tax increase would have to be approved by the county commission. On the whole, it would not affect most residents of the county, but as a tax increase, it takes its place on the lengthening list of tax initiatives that are making voters weary of tax increases, whatever their source. In addition, the county raised its own property tax rate 15.4 percent, as did Flagler Beach (22 percent), as did the school board (4.3 percent), to offset falling valuations. And in 2012, voters will be asked to renew two half-cent sales taxes currently assessed (one half-cent pays for school technology and infrastructure, the other half cent pays for municipal infrastructure).

County and city managers routinely have discussions or exchange written communications with their elected officials. What they may not do is use those communications to make deals behind the scenes ahead of those issues coming out in public meetings. A county or city manager may not speak to his board members individually to act either as a conduit of board members’ ideas or positions, or to use those ideas and positions to shape discussions with each board member individually. Nor may he use a memo to “bounce off” ideas from elected officials as a means of polling them on their positions out of public view. That would be a violation of the state’s sunshine law, which forbids communications—and deal-making—between elected officials of the same board outside of public meetings.

The commission next meets on Sept. 8.

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22 Responses for “It’s Raining Taxes, Cont’d: Behind Scenes, County Manager Floats Sales Tax Increase”

  1. Federally ordered Business Building says:

    It is further ordered, That, not later than six (6) years after the service upon respondents of this order, respondents shall cause the corporate headquarters of ICDC to be transferred to and located at respondents’ property at Palm Coast, Florida.
    (1) shopping center building or buildings located upon respondents’ land at Palm Coast,with a total floor space of at least 40,000 square feet;
    (2) an office and reserach park area locateed upon respondents’ land at Palm Coast, to consist of at least 40 acres, which shall include appropiriate roads, water lines, sewers and landscaping suitable for possible future construction of office buildings or research facilities;

    (3) a multi-purpose office structure located within the office and reserach park area referred to in (2) herein which shall have a total floor space of at least 5,000 square feet;

    Page 952-953 Federal Trade Commission Decisions, Decision and Order 88 F.T.C.

  2. Stokely C says:

    The county administrator does not want to allow the voters to decide on a new tax. This cloak and glove maneuver reminds me of the type of dealing that the town manager of Palm Coast has engaged in to get a city hall built. The only difference is that the voters of Palm Coast have voted against building a new hall. Well, maybe one can invoke semantics and argue that the voters rejected the use of bonds to build the city hall but not the city hall.

    The county commission should show this man the door. On one count for not being too bright and the other for proposing questionable solutions. First he wants to purchase land for an inflated price from a developer who flimflammed the county once. And the developer may do it again. Now, if this report is correct, he is attempting to circumvent a balloted tax proposal that no one in their right mind should support. If he plans to make an end run he ought to have enough sense to wait until after the vote in November.

    Who does the county administrator work for? Enterprise Flagler, or the Chamber of Commerce?

  3. Kip Durocher says:

    This whole series of Machiavellian intrigue to get tax dollars to private enterprises such as Enterprise Flagler is begining to smell like the beach does occasionally – fishy. Mr. Cullis of Enterprise Flagler wants quite a lot tax money but does not want any accountability. His agency needs to divulge the salaries of himself and all his other key players. Taxpayers have a right to know this if they are asked to foot the bill. If he refuses they his requests go to file 13. All the while The Chamber of Commerce lurks in the background looking for dollars. Mr. Coffey has his back up, ignore the voters plan. I concur with Stokely – who does he work for. We could build a big Airport Commercial Transportan/Manufacturing facility and compete head to head with the defunct Daytona Beach Airport Commercial Transportation/Manufacturing facility. Whomever gets the least amount of business for the most taxes spent wins!!!
    Mr. Coffey wants to buy salt marsh from Bobby “Mr Aruba” Ginn. Does this man not learn. He says people will build septic tanks and wells on their islands and access them by boat. It is evident from his statements that he has never been anywhere near where he speaks of. At low tide the people may yacht in by flat bottom john boat only and at high tide maybe a small modified-v craft. Of course the islands would be accessable most of the time by canoe and kayak. The problem with the well would be 1) how to power it, and 2) how to hit other than brackish water. I think one would would have to know Moses to get a State permit for septic tanks on those islands. There are those that will disagree..cement plants..the likes…but that land is basically marsh, oyster bars, deep mud and an occasional little piece of land. However, I would be in favor of buying it from the Ginn corporation if Bobby would come to Flagler County and negotiate the price. I know seceral agencies and individuals who would love to have lunch with him.

  4. Peachie says:

    Dear County Commission Members-

    Any of you who support Mr. Coffey on this initiative will not have my vote and I will do everything in my power to keep you from being reelected.

    I move to FIRE CRAIG COFFEY!

  5. Justice for All says:

    Excellent article. Good point about how the Sunshine law is supposed to work. I doubt Coffey came up with this on his own. In 2003 the residents voted to allow the County and City to negotiate a reduction in ad valorem taxes for potential businesses to relocate here. Time to draw a line in the sand or this will never stop.

  6. Will says:

    In response to Kip’s comment about Cullis’ salary. As far as I know, the officers and board of Enterprise Flagler, except for the director and the project administrator, are volunteer community leaders giving freely of their time.

    To others casting aspersions on the Chamber of Commerce, it seems like there is a lot of misunderstanding out there as to what the Chamber does and how it does it. The Chairman and Board are volunteers working for the good of the community. The President and staff are paid employees. And, though the Flagler Chamber and Affiliates are members of the Florida Chamber and the US Chamber, the Flagler Chamber is locally independent and does not take marching orders from either the state or national organization.

    Instead of griping and blaming Enterprise Flagler and the Flagler Chamber for trying to make private profits from tax money, I really think people need to take a step back and look at the proposals at face value without looking for an ogre behind every tree. Efforts of goodwill for the community are being knocked around like a hockey puck. We can collectively do better than this.

  7. Problem Solved says:

    CLEAN HOUSE—County Administrator, Assistant County Administrator, County Administrative Assistant, County Attorney, Assistant County Attorney, County Commissioners, County Spokesman, County Finance Director……That alone would save tax payers over a million dollars a year just in salaries and benefits!

  8. George says:

    @Will: This is a private venture of which no taxpayer dollars should be a part of, ESPECIALLY during an economic time like NOW! This very referendum is indicative of the practices of both the Florida Chamber of Commerce and U.S.Chamber of Commerce, both politically driven organizations. I was under the impression the local Chambers took no political stances, but it became political when taxpayer dollars were involved, the Chamber should distance itself from this referendum or lose members.

  9. George says:

    I will boycott the Chamber and its membership for supporting this referendum, my dollars will go to neighboring counties until then. BOYCOTT THE CHAMBER!

  10. BW says:

    Will, I agree that all issues should be looked at objectively. The present proposals, objectively, are absurd. Not simply because they are a ‘tax’ proposal, but because the plans to use those funds are ‘pipe dreams’ at best. Because of the absurdity of ‘build it and they will come’ types of attitudes, people are left wondering who’s really trying to benefit here? You may call that ‘good will’, but I personally have a hard time thinking that any group of intelligent adults asking a community for more money with no real plan (or a any history of real ability in the area) is very questionable.

    In regards to sales tax increases, not a good move in my opinion. First of all, business already has stated that it is too expensive for them to come here. We raise a bed tax, and now want to raise a sales tax? Objectively, we are publicly saying to the outside world we do not want people coming here either for business, vacations, or shopping. It’s an out-of-touch mentality if you ask me. If this is approached by circumventing a local vote on the matter, that would not sit well with me either.

  11. SAW says:

    Good to see people are finally catching on, Enterprise Flagler, all the Chambers, Florida Leaque of Cities etc.etc. all eat from the same trough and are loaded up with developers,realtors and the like.

    These groups love pushing the unregulated growth machine that helped put us in the position we are in right now.

    They make up the plans and the local commissions sign off, and the merry go round continues, be sure to vote YES on Amendment 4 ,the amendment which keeps these groups awake at night, the one they are collecting millions to defeat,” follow the money”.

  12. says:

    like i said in my past comments, lawyers and bankers are not to be trusted. i also forget to include politicians in this same boat. if there is a way to go around the people’s vote they will find it.

  13. Robert L says:

    On the other hand the county administrator may be acting at the behest of the county commissioners.
    Something like the good guy bad guy routine. It is just a little difficult to figure out who is the good guy and bad guy in this scenario.

    I agree this is not a sound proposal. Anyone presenting it could be called deceitful and/or deceptive. Or possibly he is floating a balloon to gauge public reaction.

    On the other hand the county administrator may be acting at the behest of the county commissioners. I question if he dreamt this scheme up by his volition. It is similar to the good guy, bad guy routine. . It is just a little difficult to figure out who is the good guy and who is the bad guy in this scenario.

    Wsh302 says don’t trust lawyers, bankers and politicians. Politicians as individuals may be ok, as a whole they tell you one thing to get elected and do as they wish once they get on board.

  14. George says:

    This is a micro-stimulus plan, you are going to Flagler County citizens and asking for a special fund to boost the local economy. Frankly I’m tired of stimulus funds and TARP funds and bailouts and I don’t want any form of it on the local level. Enterprise Flagler, The County Commission and the Chamber of Commerce are going to have a Tea Party protest on their front door steps. This is bigger government from a surprisingly Republican backed group of organizations. What happened to fiscal responsibility?

  15. Kip Durocher says:

    @Will “Efforts of goodwill for the community are being knocked around like a hockey puck.”

    Sorry Will but these are not efforts of goodwill, these are issues involving the spending of millions of dollars of Flagler County taxpayer’s money.
    Did you even read your own post?
    “Instead of griping and blaming Enterprise Flagler and the Flagler Chamber for trying to make private profits from tax money”
    This is exactly what I am against. We do not need Enterprise Flagler and it’s well paid staff at all. The interest of Flagler Chamber of Commerce is more business for members at any costs, enviromental, human congestion. these do not figure in their equations. Their concern for the taxpayer is nil, other than getting some tax money.

  16. Carl Laundrie says:

    For the record, County Administrator Craig Coffey did not propose a half cent sales tax. The proposal was made by a member of the Tea Party organization Vincent Ligouri. Ligouri appeared before the County Commission on August 16 and proposed a sales tax as an alternative to the property tax proposal for economic development on the November ballot. Prior to that Ligouri also spoke to the Palm Coast City Council. Coffey’s memo to city managers was a simple discussion of how Ligouri’s proposal could work if the elected officials of the cities and the County wanted to pursue Ligouri’s proposal.
    I encourage you to see and hear the discussion first hand by going to the county’s web site click on Flagler County Government TV on the right hand column of the home page, then click on “online video demand archives” and then click on “view meeting archives” and then select the video of the August 16 meeting. The video of the meeting will start and Mr. Ligouri’s presentation comes on a few minutes into the meeting.
    Coffey in no way violated the State’s Government in the Sunshine Law. Coffey is free to discuss anything with other city managers at any time. The Sunshine Law applies to elected officials and the citizen committees they appoint to provide input on the decision making process of County government. It is Coffey’s job to inform Commissioners of the facts of a proposal which is which is what occurred when he informed the County Commission of the legal details of Ligouri’s proposal.

  17. Larry says:

    thanks for the information Carl. The TAXED ENOUGH ALREADY (T.E.A) Party proposed this plan? This group is a sham, they decry government spending and higher taxes, but corporate welfare as long as it’s proposed by conservative backed organizations like Enterprise Flagler and the Chamber its perfectly fine, God forbid if it were a ‘librul’ organization, they’d be burning an effigy of George Hanns.

    Pierre please write a piece on this T.E.A Party hypocrisy! Tom Lawrence=Chamber Board member, Chamber=Enterprise Flagler referendum. Someone connect the damn dots!

  18. Justice for All says:

    The scare tactics should start shortly. You know, the ones about how this tax will help with the disproportionate burden carried by residential real estate taxes. And how if we just had our own building to offer, we could compete for jobs. Don’t be fooled!

  19. Mike says:

    That would be a really tiny effigy, can you ignite something that small? ROFLMAO! I couldn’t help myself, so sorry!

  20. Will says:

    Larry – maybe you misread Mr. Laundrie’s comment. A Tea Party member proposed the sales tax increase which is what this article is about. The Chamber and Enterprise Flagler are supporting the idea of the small economic development tax.

    And since the local tax burden in Flagler Co is paid mostly by homeowners, it’s logical to think that if more businesses came here, that there would be a shift as the businesses picked up a share of the taxes. That, in turn, would lift the burden from homeowners. One plant or factory won’t do it all, but the process has to start somewhere.

    Forget the Republican/Democrat political comments – we have volunteer and elected leaders working on building the county’s business base from both sides of the aisle.

  21. Larry says:

    No, I didn’t misread it, I understand that the T.E.A. Party member proposed the increase of the sales tax, which is hypocritical of their movement, hence the acronym T.E.A., but as a group they also supported the Enterprise Flagler referendum, their leader is Tom Lawrence. Now with this NEW sales tax proposal your shifting the burden from just homeowners and evenly distributing the burden for those who do business here, live here, visit here, etc. it’s a very socialistic thing to do in a very basic form but for the benefit of businesses, taxpayers may or may not see a return, but Ginn, the cake company and Palm Coast Data didn’t quite pan out so well. With all the new and existing taxes on the horizon, I may just start my own populist uprising.

  22. Kip Durocher says:

    @ Will
    “we have volunteer and elected leaders working on building the county’s business base from both sides of the aisle.”
    You left out two other groups, the very, very, well paid employees of Enterprise Flagler and The Chamber of Commerce.
    Does anyone know how to telephone order from Cakes over America?

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