Jane MusgraveProposal to create MSTU would cut taxes for city residents, shifting the burden to property owners outside of cities.
In a decision that could pit residents of the unincorporated area against people who live in cities, Palm Beach County commissioners last week moved a step closer to creating a special taxing district to pay for a large chunk of the $1.2 billion-a-year operations of the sheriff’s office.
But whether the commission will move forward with a plan that would force Sheriff Ric Bradshaw to detail how he spends his money and eliminate the commission’s obligation to absorb all of his spending remains to be seen.
By a 5-2 vote, commissioners agreed Tuesday to set up a framework for a municipal service taxing unit, or MSTU, to raise money to cover the sheriff’s mounting expenses.
But options remain. Commissioners could dump the plan when they consider it for final approval on Sept. 15. Or, they could refuse to activate the MSTU next year, the first time they could tap it to pay for a portion of Bradshaw’s budget.
During Tuesday’s debate, commissioners vehemently disagreed about the fairness of the proposal that would force property owners in the unincorporated area to pay for Palm Beach County Sheriff’s Office deputies to patrol their neighborhoods.
Currently, all county landowners, including those who live in municipalities and pay city taxes for their own police forces or for contracts they have with the sheriff’s office, help pay for the patrols.
“People who live in cities have subsidized people who don’t,” Commissioner Gregg Weiss said. “It’s simple math.”
If the MSTU is approved, unincorporated property owners, who account for about 45% of the county’s population, would pay a new tax for law enforcement services. It could add an estimated $6 per $1,000 of valuation to their tax bills, county budget officials said.
Meanwhile, all county property owners would see their tax rates drop by about $2 per $1,000 of valuation. While all county landowners would have to pay to operate the jail and other countywide services the sheriff provides, they would no longer have to pay for patrols in the unincorporated area.
Double taxation for city residents
Commissioner Maria Sachs, who represents the sprawling unincorporated areas west of Boca Raton and Delray Beach, called the proposed taxing scheme unjust and discriminatory.
“This is a discussion about the fairness of taxation,” she said. “This is unfair taxation on people depending on where they live.”
But Commissioner Joel Flores countered that the current system is unfair.
The former mayor of Greenacres pointed out that his neighbors pay about $20 million annually in city taxes to have the sheriff’s office patrol their streets. Yet, they also pay for patrols in the unincorporated area because it’s part of their county tax bills.
Cities with their own police forces raise money through a property tax paid just by city residents, but those residents also pay the county property tax, which covers PBSO’s patrols.
“That means that 39 municipalities who are using their own police or have a contract with PBSO are being double taxed,” Flores said.
As tempers flared, Mayor Sara Baxter accused the four commissioners who live in cities — Weiss, Flores, Maria Marino and Bobby Powell — of supporting the MSTU because they personally would get tax breaks.
She also told Weiss he shouldn’t be involved in the discussion since he is leaving the commission in November because of term limits.
That means he won’t be on the commission next year when commissioners decide whether to activate the MSTU, said Baxter, a first-term commissioner who flirted with a run for Congress and faces both an August Republican Party primary and a November challenge in a district previously held by Democrats.
Baxter joined Sachs in voting against the taxing district.
She later apologized to Weiss for accusing him of acting in self-interest and saying he shouldn’t be involved in the discussion. Many of her constituents in the county’s western communities, including The Acreage and Loxahatchee, live in unincorporated areas and would be hit by a tax boost. The issue, she said, “is very emotional.”
Sheriff doesn’t share line-item budget
Sachs pressed county budget officials on how much all county residents would pay for the sheriff’s operations and how much residents of the unincorporated area would pay.
Sherry Brown, director of the county’s Office of Management and Budget, said it’s difficult to calculate exact figures because the sheriff doesn’t give the county a line-item budget.
In his proposed spending plan, Bradshaw said he expects to pay $752 million for “law enforcement.” But he doesn’t detail what those costs include or how much is spent exclusively in the unincorporated area.
Likewise, some of the sheriff’s operations, such as the jails, courthouse security and the crime lab, benefit all county residents. In his proposed budget, Bradshaw says he plans to spend $269 million to operate the main jail and the one in Belle Glade next year. But he doesn’t break down how much he spends on courthouse security, the crime lab or other services that potentially benefit all county residents.
If the MSTU is approved, Brown recommended that a consultant be hired to comb through the sheriff’s budget to answer those questions.
Forcing transparency
Once that is done, tax rates for the MSTU and rates for all county residents could be set, Brown said. That’s how Alachua County determined its tax rates when it created a law enforcement MSTU, she said.
Marino, a Republican, said one of the advantages of the MSTU would be that people would be able to see how the sheriff, a Democrat, spends his agency’s money.
“I’m in favor of the MSTU because I’m in favor of his budget being a lot more transparent,” she said. “The sheriff will have to justify whatever millage rate he collects in the MSTU. He has to justify his budget in order to collect.”
Flores, a Democrat, said the sheriff’s spending, which accounts for half of the county’s $1.6 billion operating budget, has grown by $100 million during each of the past two years. The increase has eaten up all the additional revenue the county has gotten from new construction and growing property values.
“It’s not sustainable,” he said.
Sachs insisted she wanted more information before she could support the special taxing district. She questioned whether cities could join the MSTU.
Brown said each city would determine whether they would rather continue to pay for law enforcement through municipal taxes or whether their residents would be better off paying a separate tax through the MSTU and dropping their municipal police force.
Sachs remained unconvinced. “If we vote today for this framework, we will not know the consequences for the cities,” she said. “I hesitate to vote for this without knowing these very important tax consequences.”
She also acknowledged the potential political fallout she would face if she supported the new taxing district. “I know what my constituents are going to say,” Sachs said. “They’re going to say, ‘Commissioner Sachs, you voted for a tax increase for us.’”
Brown and County Administrator Joe Abruzzo said they would try to have answers to Sachs’ questions by the Sept. 15 meeting.
Spurred by state’s unsubstantiated claims
Abruzzo said he began thinking about creating the MSTU after state CFO Blaise Ingoglia repeatedly praised Bradshaw for holding the line on spending and blasted county commissioners as spendthrifts who wasted $443 million last year alone.
Ingoglia offered no evidence to back up his claims, which Abruzzo said are patently false.
“The initial discussion on this was to separate it out to show the state that what we do as the board of county commissioners is much different than what the CFO says,” Abruzzo told commissioners.
The MSTU could also help the county avoid drastic budget cuts if voters in November approve a constitutional amendment that could vastly decrease property tax collections by increasing homestead exemptions, he said.
Commissioner Marci Woodward agreed that the MSTU would offer the commission options if the amendment passes. The decision to activate the taxing district wouldn’t be made until next year, when the budget ramifications of the November property tax vote become clear.
“I like the word framework,” she said of the word Abruzzo and Brown used to describe the commission’s preliminary decision to create the MSTU.
“We’re talking about buying the frame, but we don’t know what the picture we’re going to put inside of it looks like yet or even if we’re going to do it,” Woodward said. “This is not final by any stretch. This is about us going to the store to buy the frame.”
