The Case for Florida TABOR

PREPARED STATEMENT
Wednesday January 31, 2007

Mike Jones
Welcome.
My name is Mike Jones. I am President and CEO of the Economic Council of Palm Beach County, Inc. The Economic Council is a member of the Business Forum consisting of leaders from over twenty-five non-profit business organizations that work collaboratively on significant issues affecting the business climate and quality of life in Palm Beach County.

The citizens and taxpayers assembled here today are concerned because it is becoming increasingly difficult to live and do business in Palm Beach County.
With rising insurance and housing costs and the residential real estate market in a downward spiral, the cost of local government is increasingly being inequitably shifted to those who do not have the protection of the Save Our Homes amendment.
At this time, I would like to introduce Richard Rampell, a Certified Public Accountant and CEO of Rampell & Rampell, P.A. Richard also currently serves as the Chair of the Tax and Budget Committee for the Economic Council.

Richard Rampell
In contrast to previous years, the business community is becoming involved in this year’s budget cycle very early in the process to help our local government officials be proactive in shaping a strategy that will truly benefit all taxpayers in the county. We believe it is our right and duty to be active participants in assisting our government officials to solve a serious problem which is growing increasingly worse. We, the taxpayers, elect our government leaders and have a tremendous stake in seeing that they succeed. This event is not a protest but an opportunity to provide constructive suggestions that are intended to help our county commissioners eventually adopt a 2008 budget that will alleviate burdensome property taxes.

Today, we are calling upon every governmental agency in Palm Beach County to “hold the line” on spending for the 2008 budget year. Immediate tax relief is needed for taxpayers who cannot afford to absorb the additional tax burden and not to pass along those costs to others.

According to various reports, “the total taxes levied at the local level climbed from $16.6 billion in 2001 to $30.4 billion last year, an 83% increase that outpaced the 12% population growth in the same period.” (South Florida Sun-Sentinel, Sunday, January 28, 2007, page 4B). “Another remarkable aspect of local revenue has been that the growth in other revenue sources has been keeping pace with that of higher property value fueled taxes. We need to keep in mind that property taxes, while by far the largest tax source, only provides 37.1% of the city, county, and special district revenue (24.7% when including enterprise funds).” These figures are according to a (Florida TaxWatch Research Report), entitled “Controlling Escalating Property Taxation and Local Government Spending and Revenue” dated December 2006, page 3).

The Economic Council commissioned Florida TaxWatch to conduct “an independent, professional and objective review of Palm Beach County’s FY 2007 Proposed Budget.” Among the Florida TaxWatch findings were:

· Tax burden and tax growth in Palm Beach County are high compared to peers and other indices

1. 12th among 67 counties

2. 1st among the 5 largest counties (Palm Beach, Broward, Hillsborough, Miami-Dade and Orange)

3. According to the County’s budget report , the adopted $4.41 billion 2007 budget resulted in a 14% increase in property taxes, nearly triple that of combined population and inflation growth (4.0%) and more than double that of personal income (7.5%)

·        Palm Beach County has relatively large unrestricted reserve funds compared to other jurisdictions
1.      Palm Beach County is the only triple-A rated county in Florida, and one of only 38 in the entire United States in this category.
2.      The County’s favorable bond rating is not due entirely to the county government’s high rate of savings, which takes money out of the hands of private taxpayers and the local economy.
3.      Competing counties seem capable of retaining their favorable bond ratings without needing to have such high reserves.

· There is a need for an intensive review of capital reserves and county operations as well as a quantitative ranking of priorities.

In response to this report, the County government appointed a special “Budget Advisory Committee” chaired by Commissioner Newell and six citizens to advise the county on possible procedural changes or other measures that will better prepare the government for impending difficult financial times. We commend the Board of County Commissioners for taking this action and remain cautiously optimistic that this committee will act in good faith to expeditiously address immediate changes and reforms that will provide relief during the 2008 budget cycle. We urge all units of government to curb spending and to explore changes in the way their budgets are constructed to address the threats new tax burdens pose to the local economy.
This issue really resonates with local homeowners who are finding it difficult to afford to live in Palm Beach County. I would like to publicly thank Al Vazquez who so graciously opened up his home to us today. We also thank his neighbors and friends in the Parker Ridge Neighborhood who allowed us to be here today to bring attention to an issue that is very important to their economic well being.
Al – would you or some of your neighbors like to say a few words?
Al Vazquez speaks

Mike Jones picks up after Al
That is why we are here today. To represent all citizens like Al throughout the county who are finding it hard to get by with skyrocketing property taxes. As concerned tax payers,we are convinced every other unit of local government faces similar challenges and needs to also find opportunities to reduce spending, promote efficiency and control the cost of providing essential public services. We encourage other individuals and groups who share our concern for the future viability of our community to join us in calling upon our elected and appointed officials to take bold action now to provide a brighter economic future for all of the county’s citizens.
The attached budget instructions are but a few suggestions by which a family or a small business could control costs and set priorities. These instructions are intended to work for taxpayers, not against them. NOW is the time to develop a reasonable budget and not adopt another excessive budget that will compound the problem. Both the taxpayers and government stand to gain by addressing the surplus items now and prioritizing them by need. No matter what is done at the state level, local governments in Palm Beach County have the ability to make decisions NOW that will make this a better community for all its citizens.
We do not pretend to know more than the experts employed and elected to wisely and prudently spend our scarce resources. Nor do we presuppose to always know what is “necessary” versus “nice”. We do, however, believe our local officials do owe taxpayers a fiduciary duty to make every effort not to collect or spend more tax revenues than is absolutely necessary.
I would now like to introduce Dominic Calabro, President and CEO of Florida TaxWatch, who will make a few comments from a statewide perspective. His organization has done extensive research and studies addressing the issues of escalating taxes throughout Florida.
…

MIKE JONES – Thank you for attending this critical event as it is an important issue for everyone and especially today as the county’s Budget Advisory Committee is preparing to meet tomorrow morning at 8 a.m. to discuss these same issues. We would respectfully request an open dialogue with the committee and an opportunity to be involved in finding solutions that work for all residents and businesses in Palm Beach County. Together we can make a difference and improve the quality of life for all who live in this great county.

We would be pleased to respond to questions from members of the media now.

To achieve this goal, we respectfully suggest the following “budget instructions” for development of your proposed 2008 budget:

In developing the 2008 proposed base budget, departmental requests should be based on the 2007 roll back level. In other words, the actual expenditures for 2007 should not increase except for the limited growth allowed by state law in the roll back level and no inflation or "built-in" or similar adjustments or add-ons should be included that would result in a total budget above the roll back level. Do not increase spending or make supplemental adjustments or otherwise add to the 2007 base budget. To meet this goal, each department should suggest the cuts or reallocations necessary to spend no more dollars than were included in this year’s budget. We suggest that this is the true "base" budget.

Any suggested adjustments to the base budget for inflation, population, increases in personal income or other relevant factors will be publicly disclosed, explained and discussed at a date certain to be determined and announced later

Separately list and rank any requested increases or supplemental items in priority order and provide clear justification for each item including but not limited to any consequences of not funding the item

Separately list and rank any capital project requests, including any previously authorized projects not yet under contract, in priority order

Assume a freeze on future hiring and deem all unfilled positions to be temporarily unfunded until otherwise authorized based on a priority ranking

A decision will be made later concerning what adjustments or increases, if any, will be made to the 2008 base budget that represent an actual increase in dollars over the 2007 budget.