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Gap of Dollars and Concerns Splits Flagler County and Palm Coast Over Sales Tax Renewal

| April 3, 2012

'People tend to want to take people hostage over certain situations,' Barbara Revels, chairman of the Flagler County Commission, says, as the county and Palm Coast wrestle over a potential $40 million to build a jail and improve the city's infrastructure. (Billie Hara)

The Palm Coast City Council and the Flagler County Commission are heading toward a showdown next week, with every county taxpayer in the middle. The two governments are at odds over the half-cent sales tax local residents have been paying, and that expires at the end of this year. The question is whether the two governments can agree on a fair split of the money, as they have in the past.

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So far, there’s no agreement. Without an agreement, Palm Coast won’t support the renewal opting instead for other ways of generating money, such as a new, steep tax on residents’ utility bills euphemistically called a “franchise fee.” (Bunnell and Flagler Beach impose just such a tax already, as do innumerable cities across the state.) And without Palm Coast’s support, the renewal, which must get voter approval, is in doubt, and with it $40 million in government revenue.

The county has several other options (up to seven such options by the county administrator’s count): it can, for example, adopt a sales surtax by a supermajority vote of the commission (at least four of the five commissioners must approve). It can also go directly to voters whether Palm Coast is on board or not, though without the county’s largest city supporting such a move, the outcome at the ballot box is in doubt.

The two governments, along with the school board and three cities, will meet in a scheduled joint session the evening of April 10 (at 5:30 p.m. at the county’s Emergency Operations Center) to attempt to work out their differences. They have not talked face to face on the sales tax issue to date.

Barbara Revels (© FlaglerLive)

“My disappointment is that there’s not a spirit of cooperation, and that people tend to want to take people hostage over certain situations,” Brabara Revels, who chairs the county commission, said on Tuesday. “But we’ve all got the exact same duties, every one of us, and I’m hoping that the intergovernmental meeting, that we can set that tone, that we’re all there to get the best for citizens at the least cost, spread the widest, and to accomplish all these health, life, safety issues.”

Palm Coast wants to concentrate on its crumbling infrastructure, particularly its stormwater system, which it has neglected for years, from a combination of low taxes and focus on other improvements. The county wants to build a new jail, or expand its existing jail, and rebuild the old courthouse annex so the sheriff can move there, away from his current, rather decrepit digs on Justice Lane. Neither government can accomplish its aims based on the current formula splitting the sales tax revenue between them. There’s simply not enough money to do it all. And each side wants more than the other is willing to yield. And so far, the two sides have done more posturing than talking.

“We have basically discussed this issue through the media,” County Commissioner Milissa Holland said. “We’ve heard their side through the media, we’ve heard Mr. Coffey’s original plan through the media.” Craig Coffey is the county administrator. “We have not sat down, we have not given a presentation on why we feel it’s essential that these facilities are expanded upon, and are necessary. Take away the other three items that you proposed up there, in the absence of coming together as collective bodies in one community, I think we’re doing a disservice to the public by just assuming that we can go to another tax and they can go to another franchise fee. It’s just been frustrating to watch that we haven’t all sat down as adults.”

But what county commissioners and city council members have said so far, each in their chambers, and what their respective administrations have impressed on them so far, suggests that the differences between the two sides are greater than anything they may have in common on the matter.

It’s a matter of numbers.

For the past 10 years, residents of Flagler County—including Palm Coast—have been paying a 7 percent sales tax, rather than the standard 6 percent Florida sales tax. That extra penny generates $80 million a year for local governments. Flagler County voters approved the extra percent in two separate referendums 10 years ago: half a cent goes to the school board, the other half is split between county government and the cities.

Most of the money financed infrastructure improvements. It’s how Belle Terre Elementary was built. It’s how 500 miles of Palm Coast’s roads were resurfaced. It’s how an earlier version of the tax paid for the county jail.

Palm Coast wants that revenue. But the city doesn’t like the formula that splits the money between it and the county. The city believes it’s being short-changed. So Palm Coast wants to do one of two things: if it is to support the sales tax renewal, it wants the formula reworked, and its share of the money increased. Palm Coast wants to take in $26 million of the $40 million generated by the half-cent sales tax over 10 years, or $2.6 million a year. (In the past 10 years, the city collected $23.4 million from the tax.)

The county, for its part, is proposing to decrease Palm Coast’s share over the next 10 years by $5.6 million, to $20.3 million.

Craig Coffey. (© FlaglerLive)

The county is arguing that it needs the greater share of the money because it must provide public safety for all county residents, including Palm Coast. Most of the people at the jail, commissioners are quick to say, are from Palm Coast, and the jail expansion is driven mostly by Palm Coast suspects. The county could raise property taxes, which affect all county residents universally, including Palm Coast’s. But Coffey, the county administrator, was discouraging that approach: it’s politically costly, because voters will take out their anger on the county, not the city. And to Coffey’s way of thinking, recent changes in law, and coming changes in law (if an amendment to the constitution is approved in November) will limit much of the potential revenue that could have otherwise been raised through the property tax.

If voters approve Amendment 4 in November, it would prohibit any increase in the assessed value of a homesteaded property if the fair market value decreases while capping the increases of non-homesteaded properties’ assessments, including commercial and industrial properties, at 3 percent a year.  “That could further lower your ability to fund anything out of property taxes,” Coffey said. “As the economy recovers, assessed values increase, you will not be able to recover the ground that you lost.”

Coffey was also critical of Palm Coast’s slouch toward the so-called “utility franchise fee” or another form of utility tax, which can be imposed unilaterally by the council, without voter approval, on electric bills, levying a tax of up to 10 percent a month on bills. The revenue potential is much greater than the sales tax, and all the money remains in Palm Coast for the Palm Coast City Council to use as it chooses.

Coffey did not hesitate to sound alarmist about Palm Coast’s plans: “On the alternatives if you’re only taking $4 million now out of the economy, whether that’s sales tax or whatever method,” he said, “and you go take $8 million now, because you can generate it with electric, then you take $4 million more out of the economy.”

Alarmist, but not quite accurate: Palm Coast would not be “taking” an additional $4 million out of the economy anymore than current taxes take money out of the economy. In a local economy, taxes are the most efficient way to redistribute money, and, unlike other private sector dollars, to ensure that the money remains in the community, and is spent locally. (Think of it this way: A dollar spent at Walmart will, for the most part, end up in Walmart’s coffers in Arkansas, then in the coffers of Walmart’s suppliers, from China to Indonesia, and in the pockets of Walmart’s stockholders, few of whom live in Flagler County. A dollar taken out by government in the form of taxation  of the kind the county and the city are talking about is then spent on a local contractor and local labor to build a jail, repair swales, repave a road: the results for the local economy are more beneficial than a dollar spent at a box store or a chain restaurant.)

Just as Coffey was citing various reasons why the city should not opt out of the sales tax, city officials last week were citing reasons why it should. Either way, it won’t eliminate either government’s needs.

“But our duties are different than theirs,” Commissioner Allan Peterson, who was once a city council members, said. “Ours are more expansive. We’re making decisions for every resident in the county. The cities are making recommendations and decisions for the residents in their respective cities.”

County Administrator Craig Coffey’s Presentation on Flagler County’s Sales Tax
(To be presented at the April 10 joint meeting of local governments)

Download County’s Sales Tax Presentation

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12 Responses for “Gap of Dollars and Concerns Splits Flagler County and Palm Coast Over Sales Tax Renewal”

  1. Think first, act second says:

    The bottom line to this is that we, the middle class citizens of Palm Coast, are being batted around by the politicians because they can’t play with each others toys, that is oversimplified but accurate. Get over the territorial defenses, you have all marked your territory like animals do, now get down to earning your money and compromise on what is best for us, not whose position is more right (and I really cleaned that up). This applies to the 10 council/commissioner employees of the citizens alike. You all work for us, remember that and act like it, not immature siblings.
    The City’s threat to burden us with a utility tax does not make as much sense as the 1/2 cent tax. With the 1/2 cent tax all visitors and citizens share the expense, but with the utility tax only us the citizens do and we have no control over whether or not they impose it nor increase it.
    I say we vote out all of the incumbents and bring in a new breath of fresh air into both groups. See you at the polls in November.

  2. NortonSmitty says:

    Wait a second, didn’t we just build a monstrously huge and ridiculously expensive Taj Mahal of a complex on SR100 to handle all of our needs for the foreseeable future? Isn’t it sitting there half empty? Won’t we be paying for those bonds for another twenty long years?

    And they want to spend the money in the fund as a down-payment on another one?

    What can a diligent and informed citizen have to say but You Gotta’ Be Shitting Me!!!!!!!!!!!!!!!

    • Think first, act second says:

      What are you saying they want to build. Are you talking about renovations to an existing building or a jail? Before complaining about a new jail, you should visit the current one, have you? What money in what fund are you saying “they” want to spend on “another” what?

  3. Johnny Taxpayer says:

    Your dollar spent at walmart vrs spent by the Government on the jail is flawed from the get go because it assumes Walmart and local Government are equally efficient in the use of that dollar, which is simply not true. You also fail to recognize that while most people complain about employment at walmart, it does provide long term and consistent livelihood for hundreds of Flagler residents, whereas spending on a Jail expansion provides short term employment, and the contract will most certainly be awarded to a large construction firm from out of town, who will bring their own employees, and only do minimal local hiring.

  4. palmcoaster says:

    The NJ editorial also confirms the unfair distribution of our taxes collected by Flagler County and now on top of it all, they want to split the half cent sales tax 50/50? No way! We need to start going to those county meetings and put some breaks on them and demand they contribute more to the City of Palm Coast for the current taxes the county keeps from Palmcoasters.
    How come my small property under Volusia County taxes pays the same amount to the County as to the City of Daytona in taxes? Do not tell me that is because the Sheriff services (as Daytona has its own police), that after all and in spite of the additional 2.6 million Palm Coast pays them after the county’s 19 plus millions county budget assigned to the Sheriff, only amounts to just 5 more deputies city wide hardly seeing and most de time replaced by empty cruisers parked around.
    As per my fair taxes distribution in my Volusia County-Daytona property, my Palm Coast home pays this county $421 too much that instead should be shared 50/50 with the city….so just to be fair and by now, lets say shift $100 or $200 to the City of Palm Coast to be discussed to make justice and stop the gouging. We should all look at some of many high management salaries paid to many specially in this county:, where the median housing income does barely reach $40,000, on a small county with only 95,696 residents (if so after the foreclosure exodus) and look at the amount of county employees to serve this county about 720. In comparison we have neighboring Volusia county with 494,593 population and they are served by only 2460 county employees. Shows that Flagler has 1.5 times more county employees than Volusia as per the percentage of population served. As I said my small property in Daytona Beach pays in City and County almost the same while the school taxes just 25% more than the city taxes. Here we have county taxes double than the city and school taxes almost 2.7 times higher than city.My example: City of Palm Coast $500, County $925, Schools $1,380…Just look at your Flagler County house tax notice. No wonder the city reserves are dwindling.
    Flagler county has about 485 sq miles but is mostly farm land with about 197 residents per square mile, when the city of Palm Coast in its 89 sq miles houses over 838.9 residents per square mile. This are census numbers of 2010. Then we see where and who generates our tax revenue…mostly Palm Coast. Indeed the city infrastructures maintenance and services are costlier as well, given the higher density population per square mile. Then county stop building fancy and millionaire structures to seat half way empty and shift some of the taxes that we already pay to the city of Palm Coast in a more equitable way. Rent some of the empty sumptuous empty spaces in your frivolous cpounty structures already paid by Palmcoasters. We need the services we are already paying for and are not being delivered so far to Palmcoasters…Anyone contesting my researched data above, is welcomed to document it.
    We have four commissioners at least that I,we know reside in Palm Coast and we need them to vote in favor of shifting some of our overpaid taxes from the county to the City of Palm Coast.
    Appreciated the next very informative and useful 2010 census link provided by “Think First”:

    • Think first, act second says:

      Palmcoaster, I am not sure which 1/2 cent tax is being discussed, but I researched the Interlocal workshop due to occur next Tuesday at 5:30 where you can go and possibly speak your mind to both city and county representatives. Here is part of the data shown in the agenda backup docs and your numbers on the splits don’t coincide with these, but again I am not sure they are the same 1/2 cent.
      “Attached is the current interiocal agreement (see Attachment 4) for the currently adopted sales tax in effect. The County currently only receives 28.7% based on the formulary in the interlocal agreement and the City of Palm Coast receives 63.6314%, with the remaining roughly 7-8% going to Marineland, FB, Bunnell and Beverly Beach.

      You say, “We have four commissioners at least that I,we know reside in Palm Coast and we need them to vote in favor of shifting some of our overpaid taxes from the county to the City of Palm Coast.” Here is a little known fact about two of those 4. Two of them do not own a house in Palm Coast or Flagler County. McLaughlin lost his home in foreclosure, so that explains that it was economics for him, not desire (I presume). Hanns has not owned a house in Palm Coast/Flagler County since 1996 and has sat on the BOCC making taxing decisions about you and me knowing that it would not matter to him, he doesn’t pay them anyway. I have fact checked this and it is accurate, but you are welcome to check on me.

  5. New Jersey says:

    Do you really believe what the Palm Coast town manager says, that the franchise tax will cost the
    citizens less money.

    So does that mean the sales tax will go away and be replaced by the franchise fee?

    No. The sales tax will remain, possibly being rolled back to its original 6%.

    Then you add on your franchise fee based on your monthly utility bill.

    Has anyone here ever heard of a new tax costing you less? Who is this guy trying to fool?

    It is like he is urinating in your eye and then telling you its rain.

    This sounds a lot like another snow job from the city of Palm Coast’s high dollar man, similar to the “ city has the money to build a new city hall”.

  6. Gia says:

    NO MORE FEES. We are paying more in water fees then any part of FL.

  7. palmcoaster says:

    Now the county wants to continuo overtaxing Palm Coast even more by threatening to build a new Taj Mahal Jail for 15 to 25 millions (reported by Observer) and have us pay for it when yet we are still paying the bonds in hour home taxes for the current County Structures in Rte 100. Even worse they one to squeeze more taxes from us to pay for the current maintenance of those as well …how did they fund that maintenance all these years since built? “Palmcosters opposed the city hall” and now again this county wants to burden our depleted pockets with higher taxes for lavish capital projects? Who is on the take with developers again? They compare the jail beds in St John County “reported” at 700 versus Flagler’s “reported” at 134. St John’s County has a population of 190,039 and Flagler county has only 95,600. St John County is our old pioneer county while Flagler is the new kid in the block. Also the median household income in StJohns is $62,663 when in Flagler County is $48,090, up to the 2010 census, probably less now. ttp://
    In Daytona Beach, Volusia County the taxes paid on residences are the same for the City of Daytona as for Volusia County. Here in Flagler we pay the county almost double of what we pay to the City of Palm Coast and most of our services except Law Enforcement, are sustained by the City. Something is wrong with this picture. Yes I know, they are going to say Daytona has its own police dept. Well, the city of Palm Coast pays 2,6 million additional for law enforcement, last I knew on top of the 19 million paid from the county budget. The city of Palm Coast has 839 residents per sq mile when the county only 197 per square mile. That shows who and where our tax revenue generates but is grossly and unfairly distributed to Palmcoasters services underpaid. What about the waste of our taxes paying for airport improvement after improvement, when that airport is only utilized not by us with commercial aircraft, but private individuals or entities aircraft. Have them fund the improvements. Mica’s head of the Federal Transportation always getting grants for the airport big time to favor the rich and ignoring the fact that this county needs real FCT not the micky mouse we currently have that if a newcomer wants to use it, have to get in the waiting list. Regarding the jail maybe those court procedures need to be moved faster to transfer those in jail to the prison system instead or house them at the over built “Justice Center” Also if more jail space needed..? do it then Arpaio style cheap and efficient, as is about the only thing I like on that man.

  8. palmcoaster says:

    The half cents tax we talk about here is that 1/2 cent sales tax ..from 6.5 to 7% approved in referendum many years ago. Originally was dedicated to fund a furture garbage landfiled then that project was done away with by a new landfield disposal contract with I believe the garbahe haulers.
    The distribution of that half cent tax is ruled by Florida law as was told and the agreement between county and city back then, nopw the county wants to undo. Then the county needs to shif some of our Palm Coast overpaid taxes collected by them to our city of Palm Coast to provide us with the services that the county collects for and does not provide. I would advise you to find how much in taxes any city resident pays in other Florida county if they own property elsewehere and see if like in Daytona, they pay equal amount to their county and not double, as we pay here.

  9. palmcoaster says:

    @Think First. Do you know that Marineland houses more dolphins than residents? Maybe about 6 residents last I knew, since the 2004 census…? and they receive 7.8% of that sales tax? What a travesty!,_Florida
    Marineland is not even shown as a Florida city or town in the 2010 census:
    The unfair distribution exercised by Flagler County of our homes taxes overpaid to and spent by them is unprecedented. Needs to be really addressed since Palm Coast incorporated and has not been done yet. Now they even want more. Sorry for my typo’s but this issue makes my fingers tingle, my mind fume and with work, no time to proof read.
    Palmcoasters get hit both ways. City also having us pay $70,000 consultants for the Parkway East Redevelopment, that actually just told us what the private owners of three/four parcels within that area, will build higher than already approved (Palm Coast Resort Centex fiasco, one of them) and more dense… City should have those private parcel owners pay the consultants, not the taxpayers…

    • Think first, act second says:

      pc, I am with you. I think we are being ripped off by the county and the controllers there, commissioners and that we are not getting what we are paying for. I can’t believe as you say they are giving Marineland such a large part of the tax income.

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