Defeated Without a Vote, Economic Tax Talk Shifts Back Uncertainly to the County

This much is clear: there won’t be a new tax for “economic development” in Flagler County this year or next—not a property tax, and not a sales tax. For all the talk of a Flagler County Commission vote by mid-November unilaterally imposing a new sales tax to that end, commissioners made clear in separate interviews this weekend that they would not agree to that route. If an economic development tax is to be imposed, it’ll have to be by referendum, a majority of commissioners say, and not before next year, which means it wouldn’t be in effect until 2012.

“As far as I’m concerned,” Commissioner Alan Peterson, who’d almost certainly be the swing vote on a sales tax proposal, “without knowing more about how the public feels, I’d certainly not vote for a half-cent sales tax. I’d put it out for a referendum. But I wouldn’t vote unilaterally to put a half-cent sales tax.” The commission has the authority to impose a tax as long as it musters a super majority of four commissioners. Peterson and Commissioner Barbara Revels are opposed. Neither wants to circumvent voters, which is why they would have liked to see the results of the Enterprise Flagler referendum.

Peterson has other objections: sales tax revenue would have to be divided between the cities and the county, resulting in a “fractured” pot that would defeat the purpose of unified economic development. And an additional half-cent tax would hurt local businesses and consumers, the tax being regressive (it hurts those at the lower end of the income scale).

Flagler County agreed today, at Enterprise Flagler’s request, to nullify the proposed tax-and-build referendum. The measure had little support, and won’t be making its way back to the ballot any time soon, at least not with Enterprise Flagler’s name on it. But commissioners agree that economic development is a priority. One of the questions they’re facing is whether imposing a sales tax instead of a property tax is the way to go.

County Administrator Craig Coffey has been preparing alternate plans that would rely on a rise in the sales tax, which raises more money faster. Commissioners could impose it on their own if they so chose though they’d have to vote in an increase by Nov. 17 if the sales tax is to generate revenue by Jan. 1. That’s not going to happen: on Monday, they agreed to discuss their next step first during their quarterly  meeting with all other government agencies in the county. That meeting is scheduled for Dec. 14. Commissioner Milissa Holland asked that a discussion about economic development, taxes included, be the only issue on that meeting’s agenda—and that the public have a chance to speak as well.

“Sales tax is definitely a consideration,” Coffey said. “To correct some of the things we have to deal with requires and investment. And you’ve got to figure out how to make that investment. Do you get grants? Do you use ad valorem taxes? Do you use sales tax? If you’ve come to the conclusion that you need to step up your economic game to change the employment situation in our county, if you’re in that mindset, the question is then, how best do you go about changing that dynamic and paying for it. Nothing’s for free. If we’re waiting for the person with the white horse, the job fairy to start handing out jobs for us, they aren’t coming.”

Coffey doesn’t see the failure of the Enterprise Flagler proposal as a failure. “I would characterize the majority of it as positive in the sense that this is kind of a community discussion that needed to occur, and what’s going to happen is, you’re going to flesh out ideas, and you’re going to batter them around and you’re going to find out ok, maybe this is not the way to go, maybe we can go this way, maybe this approach.”

Holland is less interested in a narrow discussion about what tax mechanism to look for—although she’s interested in that as well—than about a broader discussion about what Flagler County means when it talks “economic development,” and how best to get there. “I do think there’s a dialogue that needs to happen on how we move forward. This issue is not going away,” she said. But several times Monday she said the discussion shouldn’t be about buildings, but about a strategy that takes advantage of the county’s varied assets, including tourism. Holland is uncomfortable with reliance on a  few large companies as job engines. “We need to be the architects of our own destiny,” she said.

The commission—and other local governments—are heading into more politically tricky territory next year, not less, if their intention is to come up with a sales tax increase. Aside from “economic development,” Palm Coast and the school board in 2012 will each be asking voters to renew a half-cent sales tax that’s been on the books for 10 years and that helps fund infrastructure and technology. If the county tacked on yet another half cent, that would raise the sales tax locally to 7.5 percent. If the county did so by putting the proposal on a 2011 ballot, voters might be turned off, by 2012, from voting for yet more sales taxes, whether they’re continuations of existing taxes or not. On top of that, three county commission seats are up for re-election in 2012 — Revels, Peterson and Hanns. Even if it’s a referendum, the commissioners would be hesitant to being associated with raising taxes.

The message Monday was: Enterprise Flagler had its turn. It’s now the local governments’ issue. Whether those governments can agree to the same musical score, as Coffee describes it, is the next question.