IE 11 Not Supported

For optimal browsing, we recommend Chrome, Firefox or Safari browsers.

Worried About Revenue Hit, County Studies Emergency Services Sales Tax

Fire-rescue officials pushed the idea of a tax swap last year, arguing it would reduce reliance upon property taxes.

fire (6)
(TNS) - Palm Beach County is studying a tax swap officials hope will at least partially plug the financial hole they say would be created if voters back a homestead exemption plan the Florida House of Representatives approved Tuesday.

The House measure, approved by a vote of 83-35, puts a measure on the November 2018 ballot asking Florida voters whether the non-schools homestead exemption should be expanded to $75,000 from $50,000 for homes worth $100,000 or more. The ballot question won approval by three-fifths of the House and Senate. If 60 percent of voters approve, the expanded homestead exemption becomes part of the state constitution.

Palm Beach County, its cities and taxing entities would stand to lose a combined $62.7 million in property tax revenue, said county officials, who waged a battle against the proposal as it gained steam in the waning days of this year’s legislative session.

State lawmakers, however, couldn’t resist the urge to pass on to voters the chance for a big property tax cut. Five of the county’s nine House delegation members voted to send the plan to voters.

Anticipating legislative approval of the expanded homestead exemption, Commissioner Melissa McKinlay urged her colleagues to reconsider the idea of swapping a portion of fire-rescue’s property tax of a half-cent increase in the county’s sales tax. That would raise the sales tax charge in the county from 7 percent to 7.5 percent.

McKinlay said she’s worried the loss of revenue from the expanded homestead exemption would hurt the county’s efforts to combat the opioid crisis, which has strained fire rescue and hospital resources. She and about 250 others attended a meeting in West Palm Beach Monday to discuss ways to combat the problem.

McKinlay and her colleagues directed county staff to research a half-cent increase in the sales tax, with proceeds used for fire-rescue services. Palm Beach County property owners in areas served by the county fire-rescue department are charged a tax rate of $3.46 per $1,000 of taxable property value that is separate from the county government’s property tax rate of $4.78 per $1,00. Under the tax swap, fire-rescue tax revenue would be reduced by an amount equal to that raised by the sales tax hike.

To go into effect, such a plan would have to be approved by the County Commission and then by voters.

Fire-rescue officials pushed the idea of a tax swap last year, arguing it would reduce reliance upon property taxes. County officials, however, worried voters would not approve both the fire rescue tax swap and another sales tax increase whose proceeds were to be used to repair roads, bridges, schools and county-owned buildings.

That sales tax hike was approved by voters in November, increasing the county’s sales tax from 6 percent to 7 percent on Jan. 1.

It’s not clear when, or if, the fire rescue tax swap would hit the ballot.

“I don’t do this lightly,” McKinlay said of her decision to have staff look into the tax swap idea. “In light of what we are trying to do here in Palm Beach County in addressing our overdose crisis, I would like staff to look. We are going to need to get a little creative in diversifying our revenue streams.”

The tax swap idea was met with interest by commissioners Tuesday.

“I think Commissioner McKinlay’s request is well taken,” Commissioner Dave Kerner said, adding that the expanded homestead exemption will damage county finances. “It’s going to be a huge burden we need to overcome.”

County Mayor Paulette Burdick expressed dismay at the legislative approval of the expanded homestead exemption plan.

“I don’t know what they were thinking up there,” she said.

The county, Burdick said, has limited means to make up for the revenue the county would lose due to the expanded homestead exemption.

Acknowledging that residents’ view of a tax cut might be different from the county government’s, Burdick said, “Yes, you might get another $25,000 exemption and think it’s a great idea. We would raise the (property tax) to secure the necessary revenue to provide for the health and safety of our residents. I’m sitting here now saying we have responsibilities.”

Other commissioners expressed interest in having staff look into the fire rescue tax swap, but Commissioner Steven Abrams made it clear that, for now, that’s as far as he’s willing to go.

“None of my comments here should be construed as support for putting anything on the ballot,” he said.

———

©2017 The Palm Beach Post (West Palm Beach, Fla.)

Visit The Palm Beach Post (West Palm Beach, Fla.) at www.palmbeachpost.com

Distributed by Tribune Content Agency, LLC.