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Going Nose to Nose, Palm Coast and The County Remain Split on Half-Cent Sales Tax

| May 14, 2012

Palm Coast's Jim Landon, left, and the county's Craig Coffey, were the two sides' pointed artillery during Monday's sales tax task force meeting. (© FlaglerLive)

The task at hand Monday morning was for Palm Coast and Flagler County to reach some agreement on splitting sales tax revenue in a way that would please both sides. No such agreement was reached in an at-times tense 51-minute meeting of a “task force” the county and Flagler’s cities agreed to assemble the last time they met and failed to agree on the same issue, a month ago.

The tension was a reflection of the hardened positions both sides have taken over the sales tax, with little room to give: if Palm Coast were to give in to the county’s demand, Palm Coast would lose about $500,000 in annual revenue that it would have to make up elsewhere. If the county were to give into the city’s demand, the county would lose 17 percent of its projected sales tax revenue annually, and have to make up that money as well. It comes down to which government will be more willing than the other to bear the brunt of voter anger over higher taxes that both sides agree are inevitable.

There’s a measure of egos in play, too: neither side wants to appear the weaker, and neither side has yet fronted a proposal that combines compromise with face-saving.

Monday morning at the county’s Emergency Operations Center, Palm Coast Mayor and City Manager Jim Landon sat on one side of a horseshoed table arrangement, County Commission Chairman Barbara Revels and County Administrator Craig Coffey sat in the horseshoe’s troth. Aside for minor agreement on the duration of the next sales tax term, which doesn’t substantially address either side’s immediate concerns, the two sides barely budged despite attempts by each to present what each thought was a compromise. Meanwhile, representatives from Beverly Beach, Bunnell and Flagler Beach sat around the table, twittering in from time to time but with little that could alter the dynamics of this battle even as they supported Palm Coast for fear of losing revenue to the county.

On occasions, Landon and Coffey, the respective sides’ artillery, fired at will. When Coffey said that one of the aims of the sales tax renewal was “that this is an existing tax, versus adding another tax,” Landon struck back.

“The premise behind that is just totally false,” Landon said, “because the idea that you’re going to take the money from the cities and not raise taxes, is just false. What you’re doing is, OK, we are going to keep a flat tax for us, take the money from the cities, and let the cities raise the tax. That’s what you’re saying. So if you need more money, the county should raise the tax. But that’s what you’re going to do anyway if you take the money from us. You need that real clear, is that if you don’t extend the time, keep it flat. Keep us whole, any other option you’re raising taxes, period.”

“We’re raising taxes with that option too, Jim. If we take less,” Cofey said, referring to the split formula that Palm Coast favors, which gives it a greater share of the revenue, “we have to raise taxes too, so it’s a matter of who raises taxes and by how much. And there’s some balance there. The question is, should all that burden be placed on the county commission.”

A month ago politicians from every local government in Flagler County sat around a big square medley of tables in the same room to talk about the best way to renew a pair of half-cent sales taxes that expire at the end of the year. Voters must approve the tax renewal in referendums either in August or November.

Flagler County residents pay a 7 percent sales tax. The 7th cent on that tax generates about $8 million. The revenue is split. Half goes to the school district. The other half is itself split between the county and the cities, with Palm Coast getting the largest share (about $2.6 million a year).

There’s no disagreement between the governments on the renewal of the schools’ portion. They’re all enthusiastically behind it. The school district voted in late April to place the renewal on the Aug. 14 primary ballot.

There’s fatal disagreement over how to split the money between the county and the cities. When the city floated the half-cent sales tax 10 years ago, the county agreed to the existing splitting formula, which gives the cities a commanding, 72 percent portion of the revenue because the cities, Palm Coast especially, have the largest share of the population. The county now wants to go with something closer to a 50-50 split (actually, the county would get 45 percent of the revenue), in line with a state-authorized formula, because the county needs to build a new jail and move the sheriff to a better location. As the county sees it, that’s a countywide need that primarily benefits the cities, since the cities generate the overwhelming majority of the crime and the need for law enforcement.

“We agreed to a bad formula 10 years ago because the city was up and running,” Coffey said. “They don’t have that same situation staring at them now. They still have infrastructure need. There’s no doubting that. But the county in the last 10 years has fallen behind. We’ve got to do our share, and it takes money to do that. It’s a question of who’s going to raise—we’re all going to have to generate revenue to meet these needs, and is it fair to put all that burden on the county when we’re already losing CRA dollars.”

CRA stands for Community Redevelopment Agency, a taxing zone that cities set up to revitalize stressed areas. Bunnell, Palm Coast and Flagler Beach all have them. Most of the tax revenue generated in those CRAs stays in those CRAs, denying the county what now adds up to about $1 million a year, according to Coffey. Revels brought up that imbalance during today’s discussion. The cities either ignored or deflected the point.

But just as the county has responsibilities, so do the cities: Palm Coast’s stormwater infrastructure is falling apart, in parts of the city to a dangerous extent, because the city, too, ignored its responsibilities over the past 10 years, to keep taxes low. It borrowed around $10 million to pay for stormwater improvements rather than raise taxes. But it cannot borrow anymore. The city is pledging to spend $7.5 million a year on infrastructure. The sales tax alone won’t generate that kind of money, unless the money is bonded.

The city is looking at new taxes on electricity, though for now the city argues that those new taxes will be in lieu of an $8-a-month stormwater fee imposed on residents: they won’t result in a net tax increase. Residents and at least one commissioner (Bill McGuire) are skeptical, for the same reason that Netts himself, at today’s meeting, characterized the nature of taxes once they’re ion the books: they don’t go away. And Palm, Coast will have the authority to raise the utility taxes by large margins (by up to 10 percent on power charges), unilaterally, without asking voters’ permission.

Revels and Coffey put forth the most substantive proposal of the day—not as a proposal the county commission agreed to, but as a first offer to the cities: The sales tax would be extended for 15 years rather than 10. In the first year, the cities would get the full revenue that they’re getting under the current split formula, which favors the cities. But over the next five years, the proportion going to the cities would decrease until, by year six, the county is receiving 45 percent of the revenue. By then, for example, the county would be getting $1.8 million a year (an increase of $700,000 over the first year), Palm Coast would be getting $2 million (a decrease of $500,000 over the first year).

Netts was not thrilled by the formula, but he said he’d take it to his council, which meets Tuesday morning. The other cities will do the same, though absent a special meeting, Flagler Beach won’t be meeting until May 24.

Netts’s proposal was this: extend the sales tax term either to 15 or 20 years or “forever.”

“As far as I’m concerned I don’t see a rationale of putting any time limit on this,” Netts said. By not putting a limit, the county can float larger bonds and generate more revenue.” That, to Netts, is the compromise the county should accept, because it holds the line on taxes while creating the potential for larger revenue.

Either way, it’s very unlikely that the county will not float a sales tax referendum come August or November, and do so unilaterally if necessary.

“That’s what I had hoped would come out of this body,” Revels said, “that we start to have a little bit of a consensus fall into places, so governments could go back and discuss among themselves, and we don’t want to have the county unilaterally put something on the ballot that isn’t supported by the cities, because we need everyone’s help.” Short of that help, the referendum’s chances of failure rise dramatically.

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10 Responses for “Going Nose to Nose, Palm Coast and The County Remain Split on Half-Cent Sales Tax”

  1. palmcoaster says:

    Sorry County Commissioners and Administrator Mr. Coffey, but ten years ago you really wasted our taxes building a bunch of overpriced and oversized Taj Mahals and castles to yourselves before its time, on a county that has barely 95,000 souls. All on the pockets of Palm Coasters your really went up high and way over the budget approved in the referendum. Now you want even more money for more castles that we don’t need or can afford. My house pays to you guys double the taxes it pays to Palm Coast that sustains the tear and wear of 839 residents per sq .mile versus county with 197 per sq. mile as per the census. This is unheard off. I pay in Daytona Beach same amount to county and city and just only a bit more to the schools. Daytona has its own police but that does not justify the split in Flagler. Our City Council and Manager Landon need to stick strong our case and don’t let one more penny go from the half cent tax that we Palm Coasters mainly generate. The Commissioners need to stop their administrator demands or face consequences as incumbents…Stop the waste and those lavish capital projects some listed below.

    http://flaglercounty.org/index.aspx?NID=870

    http://flaglerlive.com/2971/ginn-corp-default-flagler-airport/
    http://flaglerlive.com/4677/flagler-county-airport/
    County Commission has been wasting our hard earned taxes left and right as can be seeing above. Also 1.5 million listed for improvements to Princess Place on this pathetic economy? Can these things wait including the I95 interchange. Do the county commissioners know how many small businesses shut their doors the last month in the county.
    My advise is to get your administrator and other than going for meetings/parties to Hammock Beach or Dunes, Sundance or Princess Place take a ride around and get acquainted. Not all that shine is gold.
    Also who is still paying the state for the half million Cake Across my pockets building?..who else but Palmcoasters.

  2. ric says:

    We pay too much in taxes to the county and get swat.Their is not a need for county commisioners because they contribute nothing to Palm Coast.. They should abolish the whole county system and let the burden fall on each city and township..

  3. SAW says:

    Why not dump the tax and then cut the waste, seems these guys n gals still don’t get it ?

  4. Mario DiGirolamo says:

    When we vote to abolish the 1/2 cent tax … that’ll be one less thing they have to argue about.

  5. Still want to be a commissioner? says:

    The salaries of the county commissioners needs to be reduced to be in ratio to the percentage of the county which they have authority over. What a wonderful way for the board themselves to reduce their own budget. Over rated county commissioners!

  6. gatorfan1 says:

    no no no no…..palm coast doesn’t need more money to waste on 10′ wide sidewalks,planting trees where nobody can see them,etc etc etc…irreponsible spending equals less tax money coming your way palm coast wasteful spenders. palm coast is hooterville,not beverly hills.

  7. palmcoaster says:

    @ Commissioner Chair Revels. Barbara, you are asking for more $$ from the cities specially Palm Coast at the same time you are planning to hire an “Advertising Consultant for your ED Dept and Ms. Helga Van Eckert. What is the prospective cost of that..? sure will be over 100,000. You demanded a detail explanation from Mrs Weeks our SOE of the cost and up front for the mailers to the voters notifying the district changes and new precinct locations “demanded by law”, but you exempt yourself of giving the approximate cost of the probably for zero result and your wish and not demanded by any law an “ADVERTISING consultant. Didn’t we spend $2,400/hour on one, last year at way over $27,000 total? We all thought that after hiring Ms Eckerd at well over 120,000 your ED pet project was completed as you still have Mr. Rawlings in the county payroll as well for over $65,000 correct? What these high pay 2 professionals actually do for their compensation if you think we still need Advertising Consultants at also Kings ransom pay? Easy to dilapidate others people’s hard earned $$. I mention all these espenditures to remind you some of the waste our taxes fund in Flagler county. Then comes this, give me more.
    Yesterday I went to Daytona Beach and once more driving bye reminded me that a city of 61,000 residents as the census shows, has its own City Hall. Palm Coast has more than that, about 75,000 residents and we the taxpayers have not approved one yet. But you guys in the county to the contrary made sure that when Flagler County has only about 95,000 residents, http://quickfacts.census.gov/qfd/states/12/12035.html and rivals in administration buildings, emergency and the Kings Hammond Justice Palace with the structures of Volusia County in Deland in a county that has almost half a million residents to pay for it!

    If anyone doubt me need to take a drive to Daytona Beach and Deland and see for yourselves. Even with these structures Flagler rivals with Maricopa County AZ, a rich county of 3,817.000 residents to pay for it. Once more Commissioner Chairman Mrs Revels and County Administrator Mr. Coffey and the rest of the BOCC remember that Sea Ray just lay off 65 workers out of his 420. At least 6 small businesses shut their doors in Palm Coast alone in May, find out how many in the rest of the county and I understand that P.C Data has the old city hall building on the market while continuo firing workers.. Can you all get a picture of this realities and stop asking for more money for your playgrounds? Step out of your handsome compensations on our pockets and stop the waste on capital improvements and useless over paid consultants. Get down to your desks and start calling prospective small businesses to move to our county and create jobs instead and also keep a better accounting of the plenty revenues in fines and violations you collect to cover up expenses. Also why is that in your Bids Awarded site maaany awarded bids do not show the cost? What about some transparency here? http://www.demandstar.com/supplier/bids/agency_inc/bid_list.asp?f=search&mi=713424 Then Commissioners object SOE over lack of budget transparency..?.what a travesty!

  8. palmcoaster says:

    @GatorF1. Sorry the real Flagler Beverly Hills seats for your enjoyment and in our pockets right there in Rte 100. Also county spends half million a year on and emergency radio …? and do not let Palm Coast to use one band for the Hospital communications, when Palm Coast contributes with 220,000 a year of the half million? What is up with that?

  9. Don't forget says:

    Reason # 1 palm coast is going in the dumps – illiterate residents – palmcoaster, did you even read that last post you wrote?

    Perhaps it’s time that both governments start spending money within their means, then we would have an issue of county vs. city.

    Another thing to think about – maybe palm coast residents don’t realize this – a large portion of money collected is from the farms in Flagler County not the minimum wage jobs in the city of Palm Coast. So PC should be thankful to the county for the past 10 years. Do a little research and perhaps you’ll learn something new rather than band-wagoning with the guy next door.

  10. palmcoaster says:

    @Don’t (let us) forget. How many languages do you command? Palm Coast is fine and looks great and we want to keep it this way, as long as will take a stand and stop the county gouging.
    Large farms get farm exemption taxes on the land or farmland rate taxes much lower than residential taxes. Second, many farms crops may even get subsidies. Farmers need all the help they can get. Let the farmers out of this issue…is not them that build castles to themselves with their hard labor….nothing to do with the farmers. Keep the ball in this court. We are talking here elected officials and their administrators bleeding our pockets and the farmers too, on behalf of special interest. Also don’t pull the illiterate and spell check on my comments I read for comments contents here, no need for spell checkers like you using derogatory critique trying to embarrass the taxpayers enough, to shut them up. All my research links are posted Where are your research links…? Document your words to avoid distortion and furthermore brainwashing to others, besides yourself.

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