Memo To Enterprise Flagler: Why Your Tax Plan Is Fumbling (and What To Do About It)
FlaglerLive | September 7, 2010
TO: ENTERPRISE FLAGLER
RE: TAX-AND-BUILD REFERENDUM
Congratulations. You unveiled your tax plan publicly last week, three months after announcing it to government agencies and convincing the Flagler County Commission to put the initiative to a vote on the November ballot. Good luck. You’ll need it.
Since the overwhelming majority of people still don’t know who you are—and nowhere on your site do you explain what on earth Enterprise Flagler is—let alone what the plan is about (just one indication of the steep climb you face if you’re going to get this thing passed), a quick summary is in order. Enterprise Flagler is a public-private economic development partnership between local governments and private industry. Local governments pay the large majority of Enterprise Flagler’s budget ($240,000 to private companies’ $60,000) and serve on its board. The tax-and-build plan would raise property taxes by 25 cents per $1,000 in valuation, or $25 a year on a homesteaded house valued at $150,000. The levy would be in place for 10 years. The $2 million in annual revenue would be administered by the county, by a yet undetermined administrative staff, and used mostly to build commercial or industrial buildings, beginning with a 50,000 square-foot facility, probably at the county airport. The building would presumably attract industry to the county, creating jobs.
That, anyway, is the theory.
- Enterprise Flagler’s Tax and Build Plan Revealed: How They’ll Seek Your Vote
- Sneak Preview of Enterprise Flagler’s Economic Tax “Game Plan”: More Details, More Questions
- Council Slams Enterprise Flagler’s Camouflage, Casting Doubt on “Development” Tax
- How the Chamber’s Tax Proposal Undermines Schools, Cities and the County
It’s doubtful the initiative will pass—not because people don’t want “economic development.” They overwhelmingly do. Some 83 percent of respondents in Palm Coast’s latest citizen survey cited economic development as either important or extremely important, by far their leading local priority. But the plan was poorly conceived. It was poorly incubated as you spent three months—three very long months—preparing it for public consumption. And it is being dishonestly portrayed as a “grass-roots initiative.”
I’m glad you put quote marks around the word when you used it on your website. But a plan concocted by the executive committee of the Flagler chamber of commerce and contrived behind closed doors by an invitation-only committee of barely more than a dozen white, wealthy, employed or gainfully retired disciples at weekly Thursday meetings hardly fits the descriptions of “grass roots.” That list of names you have there—the Garry Lubis, the Patrick Kellys, the Mark Langellos, the Doug Baxters and Michael Chiumentos of the local world—are a who’s who of Flagler County’s rarefied good ol’ boys’ annex. Perceptions aside, there’s nothing inherently wrong with good ol’ boys. They can get things done in the right circumstances. But these boys fear grass stains. They don’t know grass roots. Which is precisely why their plan—your plan—is in trouble.
I haven’t been a fan of this initiative, even though I have nothing against higher taxes: I think our property taxes are damagingly low. But your tax plan isn’t an answer. I’ll tell you why, and try to provide some alternatives that might have made it more appealing. But with less than two months to go before the election, it’s probably too late.
The message. Sports analogies are risky. They’re like verses from scripture. You can always find their opposite. Phrases like “Get Flagler back in the game” and “Flagler County has been sitting on the bench long enough” send the wrong message. They don’t help your campaign. They undermine it. You’re telling me that Enterprise Flagler has been sitting on the bench all this time, with the $240,000 a year in tax-dollars funding the agency going to waste. Rather than getting back in the game, I’d have been interested to hear of a game-changer. You could have crafted your message of a new tax around that pitch: Unlike other counties, we’re not going to wait for the economic climate to change. We’re seizing the occasion. We’re changing the climate—and the rules—on our terms: a tax as game-changer sounds more appealing than a tax to resume doing the same old thing. And yes, you are doing the same old thing, only you’d do it with more money.
The messenger. Enterprise Flagler has a serious image problem starting with its purpose and transparency. Most people don’t know what you’re about. They think you’re a club of insular men (mostly men, anyway) who like to do things their way, maybe to line up projects that help line their pockets along the way, with little regard for the public, let alone public accountability. For all your good intentions, the perception is closer to the truth than not, especially the way this tax-and-build plan was put together. There’s a reason local governments—the school board, the city, the county—have each been successful in passing referendums in the past 10 years. Besides the fact that government does run certain things better than private industry, there’s plenty to be said for openness and accountability. It’s a shortcut to public trust. Locked doors do the opposite. A website and a Facebook page are no substitute for making your budget, your documents, your membership (all but your negotiations with prospecting companies that are owed discretion) transparent.
A look at your budget might raise further questions: You spent $6,200 on “business recruitment” expenses in 2009, out of $370,000 in total expenses. That’s just 1.68 percent of your expenses on what’s supposed to be your core purpose. You spent more money–$7,000—on expenses by the board and its committees (that all-volunteer board you talk about) than you did on business recruitment. In comparison, you spent $224,000 on personnel. This year’s expenses aren’t that much better: $21,000 on business recruitment, still almost $3,000 less than you spent on total membership and organization expenses. No wonder you want to keep that under wraps: Enterprise Flagler looks like its own most profitable enterprise fund. Needless to say, FlaglerLive obtained those figures through no help of Enterprise Flagler.
The county airport’s white elephants. To suggest that raising taxes to build spec buildings is anything new in Flagler strains credibility. The county spent millions in public dollars in the past decade to build up the county airport in hopes of keeping or attracting industry. Admittedly, it did so without asking the public’s permission. All three buildings designed for that purpose flopped, leaving the public holding the bag. County Administrator Craig Coffey loves to split hair and say that taxpayers aren’t on the hook for it all, because the airport generates its own revenue. He’s wrong on two counts: public money is public money regardless; and the more than $200,000 a year going to mortgages on empty buildings is wasted public money that could be better spent elsewhere. Three buildings stand empty at the airport. One of them is set to be a new company’s home. We’ll see. The other two are whistling in the wind, at our expense. And you want to build more. The difference, you say, is size: the county has no 50,000 square foot facility. But what’s to say it’ll be filled by a company with more scruples than, say, the Ginn Co.? Why should taxpayers underwrite that risk when they’ve already been burned?
Your plan doesn’t explain. The bit about needing a 50,000 square-foot facility might be compelling. But in that case, you should tell us what companies looked to relocate here but declined when they couldn’t move into a building that size. Tell us their names. Let us hear their testimonies directly, and let them tell us who won them over instead. Then we’ll start believing the story.
What’s Palm Coast’s new city hall got to do with it? Speaking of 50,000 square foot facilities: Palm Coast’s city manager, Jim Landon, convinced the city council to plow ahead and build a 44,000 square foot city hall in Town Center, for $10 million, without raising taxes. If that $10 million is available for construction, and it’s true that the city and the county are all working toward economic development, then what on earth is the city doing, building a structure that won’t add a single job (it just laid off more than a dozen)? Is housing the city’s employees in plush surroundings more important than building a facility that could attract high-paying jobs? It looks that way. Enterprise Flagler’s plan doesn’t address the contradiction.
Voters don’t care who’s doing the construction. They know public-money waste when they see it. They also see through the crock of talking economic development with one side of the county’s mouth (the county side) while another side of that mouth (the city’s) plunks $10 million in taxpayer dollars on a scaled-down Taj Mahal that won’t do one thing for jobs. The last thing they’ll see is local governments working in unity toward an economic development plan. Enterprise Flagler couldn’t look more benched on that one. Imagine how effective a spec-building plan would have been if Palm Coast’s apparently available $10 million could have been shifted to that purpose. Fewer people would have objected than are objecting to a new city hall.
The overriding issue is that the city opposes the Enterprise Flagler tax plan because it won’t get anything out of it. So much for a unified front.
Palm Coast’s mega-developments. Palm Coast has been racing the Nov. 2 clock to get three massive new developments in the works. (If the “Hometown Democracy” amendment to the constitution passes, local governments would have to get voters’ permission for those developments in the future.) The three developments would add a combined 14,500 homes and 5.7 million square feet of industrial and commercial space. Industrial parks are theoretically on the way, to be built by private developers. Why should taxpayers foot the bill?
The answer I keep hearing is that those developments are far down the line, because of market conditions. But market conditions might argue against any industry coming here to fill a building paid with tax dollars. Assuming there is no such delay: eventually, those other millions of square feet of industrial space will be developed. Developers will want tenants. The glut of industrial space might cause yet another round of empty-building syndrome like we’re seeing now at the airport. Again: why assume the risk at public expense? A more convincing approach would have been to discuss Flagler’s long-range economic development plan by explaining where the city’s mega-developers’ industrial parks fit in that overall picture, and why it would still make sense to pile on the spec buildings. It appears not to.
The school tax. It’s unfortunate that the tax-and-build plan is going to compete with the school-tax referendum on November’s ballot, even though the school tax isn’t new, like yours. Rather, it’s a renewal of an existing tax that school boards had been implementing, but that the Legislature decided should be implemented only by voters from now on. When it comes to economic development, there is no substitute for good schools. Enterprise Flagler should have been at the forefront of that school tax, organizing and campaigning on its behalf (though I’m not so sure the school board would be too thrilled, given Enterprise Flagler’s reputation). The tax-and-build plan will confuse the issue, and undermine the school tax (and possibly subsequent tax referendums) by giving voters the sense that they’re being shaken down.
Ideally, school taxes and economic development taxes should go together. That those two referendums appear as competitors is emblematic of the tax-and-build plan’s many problems. It underscores the plan’s isolation from the rest of the county’s larger interests.
That isolation is growing, now that the county manager is floating that back-room sales tax alternative. The half-cent sales tax would raise almost twice as much money as the Enterprise Flagler plan, thus enabling the money to be divided between the county and Palm Coast, to curry broader political favor. It’s not necessarily a better plan, as it doesn’t answer many of the problematic questions raised by either the county or the city turning into private industry’s risk-bearers at the public expense. Rather, it’s another indication of vague urgencies competing to get a half-baked plan—any plan—going in order to use tax-dollars to build an industrial park or two. The desperation and vagueness alone should make the public suspicious. It has.
Which argues for one alternative more convincingly than others. Enterprise Flagler should concede its plan’s shortcomings and do the only thing that would help future tax referendums most—including, potentially, a better thought out economic development tax. Enterprise Flagler should pull the tax-and-build measure from the ballot.