Flagler County Commissioners Want Public to Learn How Homestead Tax Amendment Would Gut Quality of Life

If voters in November approve the proposed amendment to raise the homestead exemption to $150,000 next year and $250,000 the following year, Flagler County government would have a $28 million deficit out of its $140 million general fund next year, and a $46 million deficit in 2028, if it were to maintain current services, including fire, policing, judicial and all other government responsibilities. The county is not allowed by law to run deficits. It would have to cut services. 

County commissioners want the public to know what that would mean.

The county administration provided those numbers to the County Commission at a budget workshop on Tuesday, based on numbers from Property Appraiser Jay Gardner, who got them from the state Revenue Estimating Conference. That’s just for the first two years. Gardner said the numbers are likely an undercount, because they don’t include a new 5-percent cap on commercial property valuations. 

“Our job is to prepare,” Commission Chair Leann Pennington said. 

To that end, the county administration prepared a “10 percent reduction exercise” pending something more drastic if the amendment passes–an eventuality Flagler County Budget Manager Brian Eichinger described as “death by 1,000 cuts.”  

“The municipalities are also going to be looking at how they’re going to get to continue to exist,” Eichinger said. “There is a possibility that some of them might have to dissolve, say Marineland. They’re very, very small. They might not have an option there.”

The 10 percent reduction is more theoretical than pragmatic, sparing most government operations and requiring a few years, years, not a few months’ budget season, to enact. It was not quite what the commissioners had requested. 

As presented, it would mean creating a referendum-approved, tax-supported library district, eliminating support for beach protection out of the general fund (which would leave sales tax revenue supporting that), eliminating Community Redevelopment Agencies, such as Palm Coast’s Town Center CRA. The county did not ask the constitutional officers to propose 10 percent cuts (the constitutionals are the sheriff, the property appraiser, the tax collector, the elections supervisor and the clerk of court) even though they account for almost half the general fund revenue ($64 million). They would have to cut $6.4 million. 

The 10 percent cut will not be enough to cover the lost revenue if the homestead proposal passes.

The chart of cuts Eichinger displayed also included an enigmatic $600,000 elimination of “strategic plan funding.” Search as you may, that line item appears nowhere in county budgets. Pennington described it as a slush fund, if not in so many words: “It was a $600,000 fund sitting off to the side for pooled expenditures,” she said. “There were $600,000 sitting in there that they wrote checks against, that’s a lot, that’s a road.”

One of the checks was a $75,000 settlement with a developer the County Commission had never approved–and in fact had opposed when it last discussed the issue at a meeting. (The county administrator has authority to spend up to $100,000 without commission approval.) 

“This is just an old practice that keeps getting out of control that needs to get reined back in,” Commissioner Kim Carney said. 

 In any case, the 10 percent exercise did not satisfy Carney, who said her idea of a 10 percent exercise was for every department to submit a budget with a 10 percent cut. “This touches one department, the library,” Carney said. “So every department is going to have to look within.”

Commissioner Greg Hansen agreed. He did not consider the 10 percent exercise as presented on Tuesday as valid. “To do a legitimate 10 percent reduction, it should be from our departments. It should be our overall spending 10 percent reduction. I think that’s not a bad drill to go through,” Hansen said. 

Carney said the county needs to cut 25 to 30 people if the amendment passes. “And if we’re asking our constitutionals to cut 10 percent, then we need to go through the same exercise,” she said. As for the beach, she said, it could come down to protecting just the 2.8 miles of beach that the U.S. Army Corps of Engineers renourished two years ago. 

Acting County Administrator Adam Mengel said the administration is prepared to do that. But he wanted the commission to be prepared for what it will see. “We’re cutting programs, we’re cutting people, we’re making choices,” he said. “It’s going to be a bit of a meat grinder and so if you’re ready for that–and it will be the public side that nobody wants to see, because we’ll be able to link positions as we discuss them to people that are working here now. So that’s where the rubber is going to meet the road.” 

Carney said it is time to show the public what the homestead proposal will cost, and to do it in a way that stops short of campaigning against it: “We’ve got to tell the public what they’re not going to get as a result of you voting,” she said. “We have to do it indirectly. We can’t do it in their face, because we can’t put out an ad. But we need to look at–the quality of life is not going to sustain. It’s not.” 

Carney was echoing candid remarks by Property Appraiser Jay Gardner moments earlier. “The whole referendum was nothing but a marketing thing,” Gardner said, describing the language of the proposed referendum as “brutally one-sided, and it’s not allowed to be. So it will be, I am certain, overturned. And I also believe that the five-year thing is illegal and it will be overturned because someone will challenge that.”

The proposed amendment does not extend the higher homestead exemptions to new homeowners moving into Florida. They would have to wait five years to reap the benefit. “You can’t put a gate up in the top of Florida and say, you know, we don’t like Yankees. We’re not going to let them come in our state. And that’s what this is doing.” He added: “We don’t get to do that. This is the United States, so that will be challenged.”

Gardner also revealed that property appraisers like him will be required to send information about the proposed referendum in the mailings containing property owners’ tax bills. “They are going to make me do stuff, and it actually says in the bill that I can’t touch it,” Gardner said. “We’re not allowed to do anything to it. We have to slip it in the envelope.” 

Commissioners were speaking in early afternoon, unaware yet that Sheriff Rick Staly had spoken bluntly and critically against the proposed amendment at a Palm Coast City Council meeting that morning. (See: “Sheriff Staly Blasts Proposed Homestead Property Tax Amendment as ‘Politics’ That ‘Screw Around With the Cities and the County.’”)

“No homestead exemption has ever not passed,” County Commission Chair Leann Pennington said. “So I go with the mindset that fortunate or unfortunate, if you’re sitting here in the seat making decisions, this is probably going to pass.”

Not necessarily, Gardner said, reminding the commissioners that the Save Our Homes Amendment of 1992 passed with 53 percent of the vote, not 60 percent. In 1992, amendments needed to clear the 50 percent threshold to be approved. Now they need to clear 60 percent. “And I talked to a lot of people that go, well, where is it going to come from,” Gardner said of the replacement revenue. “Then the other half of them tell me what crooks y’all are, and you’re squandering money, and use words like, not just waste. I don’t mind saying waste. Fraud and abuse, which I get offended when they say that.”

“Keep in mind, they’re very proud of this, and they think it’s not going to hurt us,” Hansen said of state lawmakers who approved the proposed amendment. “They actually believe that, and then I think in some counties it’s not going to hurt. It’s different for us.” Flagler County is more reliant than almost all other counties on homesteaded tax revenue. 

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