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Commission Approves Chamber’s Tax Referendum for November Ballot

| June 7, 2010

Up to you now.

On November 2, Flagler County voters will decide whether to raise their property taxes modestly to pay for new commercial properties or tax breaks to businesses. The measure is intended to spur job creation and diversify the commercial tax base of a county overwhelmingly reliant on residential property taxes. It is being put forward by the Flagler County Chamber of Commerce and Enterprise Flagler, the county’s private-public economic development partnership, with support from home builders and Realtors—a collection of interests typically opposed to taxes.

The Flagler County Commission, which must sign off on a county referendum before it appears on the ballot, voted unanimously Monday to include the referendum on the November ballot after raising some questions and making slight amendments to the proposal.

Dispensing with a previous tendency to couch the proposal in rosier euphemisms that call the tax something other than a tax, Michael Chiumento III, the chamber’s public point man on the proposal, presented it directly as “a significant amount of dollars. The issue requires this type of money to right the ship.”

The direct approach came across as less a pitch than an earnest appeal. The approach also spoke of an ongoing adaptability to the sort of criticism the proposal has been picking up, along with some support, as it’s made its way to the commission: When Chiumento rolled out the idea to the Palm Coast City Council less than a month ago, the life of the tax was set at 20 years. The ballot language presented to the commission on Monday had it down to 10 years.

The tax would equate to $25 a year for a homesteaded property assessed at $150,000. It would raise $1.8 million in its initial year, significantly more in subsequent years as values presumably rise again. The money could be spent outright on economic development projects or bonded to raise more money (with tax revenue used to finance the bonds). Up to 60 percent of the money would be spent on actual, physical construction of light industrial or commercial buildings. Up to 30 percent would be spent on business tax incentives. The remaining 10 percent would be spent on “promotion”—the wining, dining and more secretive aspects of local bigwigs attempting to seduce other businesses into moving to the area or, in some cases, staying here (as with Palm Coast Data two years ago). That’s where the commission made a slight amendment: the proposal initially set out the percentage breakdown as hard-and-fast rules. Commissioner Alan Peterson objected. Chiumento, adapting again, immediately conceded that spending “up to” a certain percentage within each category made better sense.

What the Chamber's Tax Proposal
Would Cost You

Property's
Taxable Value
Annual Tax
Homesteaded
Annual Tax
Not Homesteaded
100,00012.5025.00
120,00017.5030.00
140,00022.5035.00
160,00027.5040.00
180,00032.5045.00
200,00037.5050.00
250,00050.0062.50
300,00062.5075.00
400,00087.50100.00
500,000112.50125.00
1,000,000237.50250.00

“Enterprise Flagler board thought this was the means to solving our issues,” Chiumento, a lawyer, said. “There’s no better way to say it to the people, that it’s going to take money to improve the situation, and the best way to do that is the program that’s presented before you.” Chiuemento strove to distance the chamber or Enterprise Flagler from the process that would eventually allocate the money raised from the tax, if voters approve it. (Chiumento led the presentation and fielded almost all questions from commissioners, with Greg Rawls, Enterprise Flagler’s director and a less polished speaker than Chiumento, standing by, along with Prosperity Bank’s Garry Lubi and Doug Baxter, the chamber’s executive director.

Commissioner Barbara Revels, who serves on the Enterprise Flagler board, was not clear on how the millions generated by the new tax would be administered. “Where is the funding for the administrative portion of the work?” she asked. “Because you’ve got 10 percent for promotion, but nothing for admin. Please explain to me what you meant for that.”

“Currently,” Chiumento answered, “the program is set up as such that Enterprise Flagler is made up of both public and private members. The city of Flagler Beach, Bunnell, the city of Palm Coast are members. They pay an annual membership into that budget. Many companies, the hospital, Sea Ray, Palm Coast Data, myself, Prosperity Bank, Intracoastal Bank, to name a few, are also members. They pay an annual membership to be part of that, and to be part of the process to help this community attract businesses. The administration is run out of that budget, and that is from membership. We do not anticipate that any of these funds will go to Enterprise Flagler. We anticipate that Flagler County will still remain as a member, Palm Coast will remain as a member, as will all the cities. Again, in order to do this right, from what we have seen and listened to the experts, it’s got to be a private-public partnership, it’s got to be one tune, one voice, but that money will not go to Enterprise Flagler to increase its operating costs at all.”

But Enterprise Flagler will continue to operate and take in money from local governments and businesses in addition to whatever role it may have with money generated from the new tax.

While it still wasn’t clear who would administer that revenue, County Attorney Al Hadded said that process would be clarified subsequent to the referendum, if it passes. The county will have to draw up an ordinance laying out specifically who will administer the money and how it is to be spent. Ultimately, Chiumento said, “every dollar that’s spent on that fund, the decision will be made by this commission.”

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2 Responses for “Commission Approves Chamber’s Tax Referendum for November Ballot”

  1. Jim Guines says:

    This is the third and final article that needs a review before we face this showdown before the community. I really can’t believe that the commission intended to shoot the school system in the foot, but it did. And in a way, it shot itself in the foot when it looks forward to the 2012 half-cent sales tax fight that it will be in. The school board stands the chance of losing $2,000,000,00, but who knows what the cities and counties will have to overcome with the voters in 2012?

  2. A TRUE AMERICAN says:

    ARE YOU KIDDING. WHY WOULD THE TAXPAYERS WANT THE COUNTY COMMISSIONERS TO HAVE THE SAY AS TO WHERE THE MONIES ARE SPENT. LOOK AT WHAT HAS HAPPENED TO GENERAL ELECTRIC. DID THE SHARE HOLDERS KNOW WHERE THEIR INVESTMENTS WERE GOING. (TO IRAN)
    THE TAXPAYERS HAVE TO HAVE A SAY AND AN ACCOUNTING AS TO WHERE THEIR TAX MONEY IS GOING. WE ALSO HAVE TO REDUCE GOVERNMENT SIZE.

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