by Mike Sharkey
Staff Writer
Based on public perception, “Joe Voter” probably thinks if the property tax amendment is defeated today, the three fees enacted by City Council last fall will be repealed.
That perception would be inaccurate, as would the perception the fees were passed in an effort to offset potential lost City revenue created by lower property taxes.
In a memo to Council members Monday, Mayor John Peyton’s Policy Chief Adam Hollingsworth explained the necessity of the fees and why they will be imposed regardless of today’s election.
“Some have asked: ‘If Amendment One fails, do the fees go away?’ The answer to that question is no,” said Hollingsworth in the e-mail memo. “Remember that the fees enacted in the current year budget helped offset the property tax reductions forced on Jacksonville by the Legislature in the current year budget. These reductions, passed through statutory changes, required Jacksonville to roll-back property tax revenue by three percent from FY 06/07 levels.
“Going forward, Jacksonville’s property tax revenue will be capped at the rate of population growth and Florida’s per capita income growth. The new, diversified fee structure, combined with budget reductions in the current year, helped balance the budget and provide for basic services (like police, fire, parks, public works, libraries, human services, etc.). In addition, the fees provide for diversification in an environment in which local government property tax revenue continues to be under attack.
“Governor Crist continues to say that, win or lose, he will continue to push for additional property tax reductions. The Florida Tax and Budget Reform Commission is considering constitutional amendments for the November, 2008 ballot that would further restrict property tax revenue. In addition, we continue to face a challenging public safety environment, likely requiring new investments like the one referenced above from the sheriff for $30 million.”
According to Hollingsworth, lower property taxes would create a financial burden.
“Our finance team has estimated that Amendment One will cost our local government between $50 million and $75 million per year in lost property tax revenue,” he said. “However, the fees passed as part of the FY 07-08 budget will help close the gap. Considering all revenue sources, and anticipating modest expense increases (primarily related to contractually-obligated wage, pension and health-care costs), we expect a total budget hole of approximately $30 million in FY 08/09 if Amendment One passes.”
Council member Jay Jabour sits on the Council Finance Committee and said he understands why many in Jacksonville would feel as though the fees should be repealed if the amendment fails. As someone who sat through hours of budget hearings in September, he remembers hearing often how devastating the lost revenue would be to the City’s nearly $960 million budget.
“I think there is a misunderstanding why the fees were passed initially,” said Jabour.
In late September, just before the start of the 2007-08 fiscal year, Council passed three new fees — a stormwater management fee, a garbage fee and a JEA franchise fee. April 1, the garbage and JEA fee go into effect, while the stormwater management fee will be implemented July 1. Overall, the fees are expected to generate approximately $25.7 million annually.
If the amendment is defeated, Jabour doesn’t expect it to go quietly.
“I still don’t believe this is the end of the journey,” he said. “Whatever happens to the referendum, the Legislature has the right to what they want anyway. First, we need to get through the referendum, then get through the legislative session.
“One thing that’s interesting is there’s so much uncertainty.”
Jabour believes it would be wise of Council President Daniel Davis or another Council member to address the matter publicly if the amendment fails. He said it’s important to communicate what happened at the polls and the effect the outcome will have on the property tax issue and the pending fees.
Robert Arleigh White, executive director of the Cultural Council, was also a regular at the fall budget hearings, often going to bat on behalf of his organization as well as dozens of area non-profits. Like many City departments, White’s budget was slashed along with most of the non-profits. White said he has already met with City officials to discuss what happens if the bill is defeated.
“We started, some time ago, thinking about this issue,” he said. “We will think creatively, and we have visited with officials at City Hall. There is no question if it passes we will all live differently.
“We are hearing all kinds of things from all kinds of people. If it does not pass, I will not be surprised if something else comes out of Tallahassee this spring.”
The fees broken down
The soon-to-be-implemented fees passed by City Council in late September are broken down into three categories. One fee is a set dollar amount while the other two are based on usage and percentages.
Garbage fee
• Implemented April 1
• $3 per month
• Expected to generate $3 million annually
JEA franchise fee
• Implemented July 1
• Based on electric usage
• 3 percent of a JEA customer’s combined electric, water and sewer bill
• Expected to cost an average of $5.31 a month
• Expected to generate $17 million annually
Stormwater management fee
• Implemented July 1
• Varies depending on a property owner’s impervious surface
• For residential property owners, this will average $5 a month
• Commercial property owners will be assessed based on a formula of impervious surface area divided by an equivalent residential unit (ERU) and multiplied by $5.
• Expected to generate $5.7 million annually