Now is the Time!

The newspapers and TV stations have thoroughly covered the property tax reform issue and the possible loss of revenues to all the counties in Florida. There are two primary ways to deal with unforeseen environmental forces that negatively impact a county's budget. The first way is to cut expenses and the second way is to increase revenues. The responses from the county commissioners and county administrators in Escambia and Santa Rosa counties have all agreed that services must be cut. A 5/20/2007 PNJ article states that the Escambia County Administrator's staff proposes the following budget reductions: $20 million in the Sheriff's Office, $3.1 million in the Facilities Maintenance Department, $1.9 million in the Road Department, and $1.4 million in the Public Safety Department. The Santa Rosa County Administrator said "among area services that could be hit if major cuts are made are parks and libraries, the Sheriff's Office, and money for nongovernmental entities such as the United Way." I believe that cutting funds from the Sheriff's Office or Public Safety Department is a bad idea and I estimate that the majority of our citizens agree with me.

The second way to balance a deficit budget is to increase revenues. Unfortunately, in all the related articles I have read and TV interviews I have seen on this subject, not one administrator or politician in either county has mentioned adding impact fees as a possible solution to the impending loss of property tax income. Now is the time! At present, 34 of the 67 counties in Florida have impact fees, and most of the counties without impact fees do not have the high level of growth currently being experienced in Escambia and Santa Rosa Counties. The table below compares the single-family home impact fees in four other Florida counties with Escambia and Santa Rosa Counties.

Note: Highlands data for 1,501 - 2,499 sf. Palm Beach data for 2,000 - 3,599 sf. Polk County data for single-family residence. Manatee County data for 4 bedroom single-family residence. Santa Rosa County data for single-family residence.

It is plain to see in the table above that Highlands, Palm Beach, Polk, and Manatee Counties have eased the tax burden on current residents by raising funds with impact fees on single family homes. Santa Rosa County currently has an impact fee for roads which is only half of what a study on the subject recommended, and currently has no other impact fees. Escambia County has no impact fees at all! On the other hand, Polk County has impact fees for roads, schools, correctional facilities, law enforcement, emergency medical services, libraries, recreation and parks, and fire/rescue. A logical question to ask at this point in time is why Escambia and Santa Rosa Counties do not want to institute a full range of impact fees such as the other counties shown in the table? All Escambia and Santa Rosa County residents should ask their County Administrators and County Commissioners this question. If the answer is political double-talk, remember that at the next election!

One final point of discussion is that impact fees are normally extended to non-residential development. The additional revenue from impact fees on non-residential development can be substantial. For example, a new 126,842 square foot Target store recently opened on Highway 90 in northern Santa Rosa County. Indian River County currently charges $12,306 per 1,000 square feet in impact fees for retail buildings. If Santa Rosa County charged this same impact fee, the new Target store could have generated $1,560,918 in impact fees. Since the total property taxes collected in Santa Rosa County in 2006 was only about $58 million, why wouldn't the county leaders jump at the chance to substantially increase revenues by charging impact fees for residential and non-residential development?

Antonio Apap is a Professor of Finance and the Chairman of the Concerned Citizens for Better Government Political Committee.