Palm Coast Largely Rejects County’s Economic Development Track, Including New Tax

You could have seen it coming from as far off as 1999: Palm Coast is not about to be subservient to any county-led economic development effort.

The Palm Coast City Council on Tuesday shot down three of the most substantial ideas favored by the Flagler County Commission: a sales tax to create a dedicated pot for economic development, an economic development council (or “entity”) with a common fund whose ultimate decisions don’t rest with Palm Coast, or any “one pot” that would collectively pool all governments’ contributions, leaving less or nothing for Palm Coast’s exclusive use: Council members  are unwilling to sign off Palm Coast’s portion of sales tax revenue to that “one pot,”  though they’d be willing to contribute a small share of that to Enterprise Flagler, the public-private economic development partnership—“understanding that Enterprise Flagler is going to need some reorganization and some better direction,” Palm Coast Mayor Jon Netts said.

Without new tax revenue, further discussions of a county-wide economic development policy becomes largely academic.

Almost at the same time, a few miles away, the county commission–in a meeting considerably more productive and less scattered than Monday’s–was putting in writing a “statement of principle” that focused on just such a “common fund” whose final spending decisions would “reside in a body that is agreed upon”—likely a new countywide organization.

In the wake of last year’s failed referendum to raise money for economic development through a higher property tax in Flagler County, local governments and business groups have veered toward raising the sales tax instead. That idea was to be an underlying theme at next Monday’s county-led summit on economic development, where elected officials from every city, the county, the school board and unelected members of the business community will present their plans on fostering more local economic activity and jobs.

That Palm Coast would not support a sales tax increase doesn’t mean it won’t happen. An additional sales tax can be imposed two ways: The County Commission can place the proposal on a ballot for popular referendum, though given recent trends the electorate is unlikely to support it. Last year’s economic development referendum was so bitterly criticized that by the time it had made it to the ballot, its backers at the Flagler Chamber of Commerce and Enterprise Flagler asked the commission to pull it. The results were never counted.

The county commission can also impose an additional sales by super-majority vote—that is, a vote in favor of the tax by at least four of its five members. Either decision rests with the county commission, not the city. The resulting dollars, should a new sales tax make it, would then be distributed by proportionately among the cities and the county, though the county is proposing that a proportion of the money would be pooled collectively and administered by that “body” to be agreed upon.

So Palm Coast withdrawing its support for a sales tax doesn’t defeat the idea. But it diminishes its legitimacy—both as a referendum and as a super-majority vote, since the government representing the county’s largest population base would end up with an imposition it does not endorse. It wouldn’t be good politics. But it may still happen.

“This discussion is kind of convoluted because you don’t know whether you’re going to have the dollars or not,” City Manager Jim Landon told the council once it was clear the council itself wouldn’t be behind the tax idea. “I think you can send the message to county commissioners that if they think the half-cent sales tax is a good enough idea, they’re going to pass it, then we obviously would work with them on working out the details. Then you can say that you all have different opinions individually as to whether the half-cent sales tax is good or not, but that as a group you need to come together as to if they do pass it, how it’s best to be spent, I guess, for Palm Coast.”

The city has a plan of its own, but it’s largely focused on the city, it would be carried out by the city, for the city, with few to no tendrils extended to the county or other municipalities. And right now, that plan does not entail enlarging the city’s economic development budget. There are small-scale, low-cost projects, such as the city’s post-card marketing to absentee homeowners or landlords, in hopes of encouraging them to return and build. There’s a revitalization plan for older neighborhoods. There’s a focus on special events. But nothing large scale. “That’s certainly the cleanest and the easiest,” Netts said of the  approach that would, for Palm Coast, essentially keep things as they are.

Palm Coast will present that plan Monday, but while discussing it for more than an hour today, it proved easier for council members to say what they did not want to see in a county-wide economic development blueprint—at least none involving Palm Coast—than what they’d be happy with. In that sense, they skirted the county’s pitfalls, evident in meetings on the matter Monday and Tuesday, where commissioners tried to define too precisely what sort of structure they saw undergirding the county’s economic development future.

Commissioners have frequently referred to the Tourist Development Council as their model—a council with a representative from each local government (except Bunnell) and several tourist-industry representatives. The TDC’s decisions are advisory only. The county commission must ratify them to take effect. City Council member Mary DiStefano is a member of the tourist council. She’s also the city council’s most vocal opponent of following that model, which she doesn’t like. “I personally don’t want to see an economic development set-up with that kind of a group, and we’re not having a strong input,” DiStefano said. “It doesn’t make sense.”

DiStefano was also adamant: no higher property tax and no sales tax to fund economic development. At first she sounded like the lone voice on that score, but council member Frank Meeker eventually joined her, and by the end of the meeting Mayor Netts, who tried through various means to find a middle ground closer to the ideas of a common pot and broader decision-making, was himself conceding: “The sense of council is that we’re not particularly interested in adding another tax on people at this time.”

Netts summed up the Palm Coast principles he’d present on Jan. 31 this way: “There are things we can do without spending taxes. By golly, I’ve heard that message real clear from the world. Do more with less. Or do less. You certainly don’t have to do more. So, here’s what we plan to do: we’re going to do as much of this as we can out of our own resources. There are certain areas where we’re going to ask for partnerships, but we’re not asking the partners to bring in money necessarily, just their efforts.”