Fearing Rejection at the Ballot Box, County Opts to Renew Sales Tax Unilaterally
FlaglerLive | July 31, 2012
Flagler County voters will not get to say yes or no this fall to continuing a half-cent sales tax that’s been on the books for two decades. The sales tax expires on Dec. 31. Rather, to ensure that the sales tax does continue, and to prevent its rejection at the ballot box, the Flagler County Commission today decided to vote in the sales tax itself—as it is allowed to do by law—with a so-called super-majority vote of the commission, when at least four of five members agree to impose the tax.
Today’s decision is the latest upshot of a series of political missteps by the county, a failure to clearly educate the public on what was at stake, and a degree of intransigence by Palm Coast. What should have been an almost routine referendum renewal turned into a damaging muddle between Palm Coast, Flagler Beach and the county, as the cities and the county disagreed over revenue sharing and county commissioners squabbled between themselves over the best strategy.
The county wanted a larger share than it’s been getting the last 10 years. The cities resisted, Palm Coast especially, saying it has the largest share of the county’s population, so it should preserve the largest share of the revenue.
The battle tarnished the referendum’s credibility. None of the commissioners wanted to see the tax expire. But it didn’t help that the county was also muddled over its intentions with the revenue: the county wants to build a new jail, or expand its existing one, but it’s been incapable of explaining convincingly why the jail expansion is needed and how much it will actually cost. The resulting mess dimmed the prospects of success at the polls, compelling commissioners to choose the more certain but also more arbitrary option of passing a sales tax unilaterally—which may also cost them when they are themselves up for election. Only one is: George Hanns. Milissa Holland is resigning her commission seat in November. She’s running for a Florida House seat. But the timing of the sales tax issue with the election won’t help the commission, as candidates could claim that the decision is being made to beat the clock–and their potential accession to the commission, where they may not have provided the votes necessary for a super-majority of four.
But going with a unilateral vote appeared to be the last viable option to keep the tax going.“There is no choice. We have to do it,” Brabara Revels, the commission chairman, said. “I understand that there are people here that cannot take that position this evening, but I am willing to take that position, and I’ll take the heat for it, and I’ll do every bit of education I can. I’ll go to any organization, I’ll go to any citizen’s group, any neighborhood watch group. You call me, I will come. I will go through the presentation. I will do every bit of education I can. But I believe we’ve got to come to an agreement with the cities, and we have to just take the heat and vote it in.”
Revels echoed similar conviction from Commissioner McLaughlin, and she spoke with a lilt of surprise about her actually agreeing with him on this one issue. The two Realtors don’t frequently see eye to eye, politically or professionally.
Part of Tuesday’s decision is to conduct a broad public education campaign to ease the way to the commission’s vote. But for that, commissioners and the administration will have to be on the same page regarding the scope of the jail expansion–itself a hard task, when even Flagler County Sheriff Don Fleming appeared not entirely convinced that a new jail or a vast expansion was necessarily the way. In an informal discussion with two challengers Saturday–Jim Manfre and John Pollinger–Fleming said the jail could be expanded by way of prefabricated pods, piecemeal, with each pod costing a few million dollars and accommodating a few dozen inmates. That would significantly reduce the financial pressure on the county, though the more the jail expands, the more annual operational costs increase. Those costs may not be paid for with sales tax revenue, but with property tax revenue. Expect the property tax to increase, too, given tepid growth trends.
Politically, County Administrator Craig Coffey had presented different options to the commission, among them a straw vote giving voters the ability to say what sort of tax they preferred (not whether a tax should be renewed or imposed) between a sales tax and the property tax. That option had some support from Hanns and Alan Peterson, but it did not carry the day, as other commissioners called it needless and confusing. The commission could also have chosen to do nothing. But that would have ended a $4 million a year revenue stream to the county and the cities (with Palm Coast currently getting around $2.6 million of that.)
By voting in the sales tax renewal, as opposed to winning the renewal at the ballot box, the county is foregoing a crucial power: it may not bond the revenue, the way it could if voters were to approve the renewal. That means the county will be giving up the power to borrow much larger chunks of money to accomplish some of its needs, the way it did with its previous sales tax renewal in 2000. That renewal led to the building boom that yielded the county’s Emergency Operations Center, the new administration building, the courthouse and other, lesser projects.
The commission is still looking for clarity on the way the tax will be designed. But the tax will be renewed for at least 15 years, possibly longer—and possibly with no expiration date. It will be renewed before mid-November, so there’s no lag in revenue collection. The formula that splits the revenue between the county and the cities has yet to be worked out, but the county is proposing the following approach: it will significantly increase its share at the expense of the cities’ share, but that expansion will be phased in over eight years giving the cities time to adjust. Over the course of those eight years, the county argues, expected growth would more than make up for reduced revenue.
Palm Coast doesn’t argue that. But it does argue that, by the same token, most of that growth will take place in Palm Coast, and all of that urban growth will significantly increase demands on the city’s infrastructure, making it difficult either way to accept a reduction in revenue.Palm Coast Mayor Jon Netts, who has led the charge against the county’s attempt to change the revenue formula, was lukewarm to the commission’s action Tuesday evening. “Philosophically I do not agree that just because the county needs to build a jail, that they a priori need to have the lion share of the money, or the greater share of the money. But that’s something we need to discuss,” Netts said. “I have one vote, one point of view. If there’s an agreement to go with that, so be it, I’ll go with the majority. But to say that it’s going to be in perpetuity, no, that, I’m not going to accept.”
It was Netts who, weeks ago in a joint meeting with Revels and other city representatives, had suggested a sales tax in perpetuity. But that proposal, he said today, was predicated on a formula favorable to Palm Coast, given that Palm Coast will remain the urban core of the county, and that it generates 79 percent of every sales tax dollar in Flagler. Netts still insists on a formula that won’t hurt the city’s future needs. “There’s got to be some room here somewhere for some kind of fair, reasonable distribution,” he said. “I will not accept the argument that the county’s needs are somehow superior to our needs. They’re just different.”
But the county, even less as it votes in the tax renewal by county commission vote, doesn’t need the cities’ approval for its plan. It will tender a compromise of its own, but it will vote it in regardless, based on the unanimous motion it approved today. That can be risky, of course: to vote in a sales tax renewal will be politically costly regardless, but to do so without the support of the cities will be vastly more so. And it was just that sort of disagreement that led to the referendum’s failure.
“My suspicion is that if we hadn’t initiated this distribution discussion, if we’d simply proceeded and said as the school board is saying, we want to continue an existing tax, there would have been very little dispute, very little discussion. I think it would have passed,” Netts said. But raising questions that didn’t get clear answers put doubt in voters’ minds. “Now we need to stand up before the voters and say, we’ve come to a conclusion, we all agree to this, this is the way it should be,” Netts said.
That will be commissioners’ job in coming months.
The county’s portion of the sales tax does not affect the other half-cent sales tax facing renewal—the Flagler County School Board’s. That measure will be on the ballot as a referendum, on Aug. 14. It has unanimous support from all local government agencies. The school board feared that the continued bickering over the county’s sales tax might jeopardize the school’s referendum. It might very well have—and could still, as voters confuse the two. But by putting the issue to rest today, the county commission was also hoping to put that confusion and controversy to rest, granting the school referendum clearer sailing.