Paying the price for tax cuts in Broward County

FORT LAUDERDALE, Fla. – Nov. 18, 2008 – Weston homeowner Tony Steinbuck fights fires for a living, but even he is incensed by the more than 50 percent increase in fire fees imposed by his city.

“It’s a big scam,” said Steinbuck, 47, a Palm Beach County firefighter whose bill jumped from $232 to $357. “That’s how some of the cities are back-dooring. They knock off some property taxes, and then charge more fees.”

The state last year ordered spending cuts and then voters in January approved additional tax relief. But in Broward County, most property owners won’t get all they were expecting. Instead, 26 municipalities and the county raised property tax rates, added or increased fees on services ranging from ambulance transport to athletic programs, or did both.

Their officials say they had little choice because essential services were at stake. But some residents and economists question whether local governments should have made more aggressive spending cuts or taken other measures, such as expanding the tax base or privatizing services.

“I think it’s totally unfair because ... they are taking more money from the citizens, which is not what the Legislature intended,” said Phil McConaghey, 75, an engineer from Pembroke Pines, one of 13 municipalities that boosted its tax rate, imposed some new fees and increased others.

A case for fees

Coral Springs this year raised more than a dozen fees, ranging from fire inspection charges to community bus fares.

Mayor Scott Brook defends the practice because fees are more targeted than property taxes.

“If you are not engaged in the service, you are not paying,” he said.

Some of the fees hikes this year are steep.

In Tamarac, for example, patients requiring basic transport from paramedics will pay $600, up from $360 last year. Plantation homeowners caught building without a permit will be charged $300, up from $200, or if it is greater, double the permit fee. Seven cities boosted their fire fees by at least 30 percent.

“We’re no further ahead with the tax cuts because of the fees,” said Lenora Chuchla, 63, of Hollywood, which tacked on an additional $33 to yearly garbage bills. “They may sound like small increases, but when you’re on a fixed income, it’s not.”

Weston City Manager John Flint said his city’s new contract with the Broward Sheriff’s Office justifies the 53.7 percent increase in fire fees. He said the old contract lagged behind inflation and the city last April added a fourth rescue truck.

Byron Jaffe, an airline pilot and Weston resident, said the fee hike is “worth it as long as the high level of service is maintained. I don’t want my house to burn down because we don’t have enough fire services to get here.”

Broken promises?

Voters in January approved a ballot initiative that doubled the $25,000 homestead exemption and allowed homesteaders to take tax savings with them when they moved. The previous spring, the Legislature ordered local governments to freeze property taxes at 2006 levels, then trim them by 3 percent to 9 percent, depending on how much taxes collections increased over the previous five years.

The point was “to ensure that local governments knew that the ever increasing gravy train is over,” said former state Sen. Steve Geller, a South Florida Democrat who pushed the tax relief amendment.

However, just five local governments – Deerfield Beach, Lauderdale-by-the-Sea, Lazy Lake, Pembroke Park and West Park – passed budgets without raising fees or property tax rates.

Pembroke Park Manager Bob Levy said the town “turned to industry to pick up the [tax] burden.”

It aggressively grew its tax base by using incentives to lure large companies.

“We could not survive otherwise because about 30 percent of our population lives below the poverty line,” he said.

On the other hand, Pembroke Pines raised its tax rate to $4.43 per $1,000 taxable property value, up from $4.17 last year. Many owners will still save money because of the new $50,000 homestead exemption, just not as much as they thought.

Faced with a $12.6 million shortfall, the city cut about 80 positions, including 67 vacancies; sliced pool hours; and imposed a four-day, 40-hour work week for some employees. It kept its tennis program going by introducing membership fees of $20 to $50. It also raised its fire fee to $209.63, up from $153.48.

Asked whether the commission considered limiting perks such as travel or cell phones, Pembroke Pines Mayor Frank Ortis said: “What perks should I have cut? The residents didn’t ask me to do that.”

Not everyone embraces the city’s choices.

“I’m not happy,” said Debbie Alley, 55, an accounting and human resources administrator. “I am concentrated on making mortgage payments and gas is higher. I will certainly think about fees when [commissioners] are up for re-election.”

The choices

Chris Edwards, director of tax policy at the Cato Institute, a libertarian research group, argues that cities should consider privatization instead of increasing fees.

“Swimming pools and any other service where the user can be charged a fee can be privatized,” he said. “Private enterprise runs things more efficiently, especially when there’s competition.”

Ronald Fisher, an economics professor at Michigan State University, argues that fees and tax rate hikes are not unreasonable if it keeps municipal services at an acceptable level. For example, he said, if a city cuts its police force, crime may go up. With fewer workers to mow medians and repair roads, neighborhoods may fall prey to blight and property values could plunge.

The goal is to generate enough revenue to promote economic growth without overburdening homeowners, Fisher said.

“Everybody wants something for nothing,” he said. “As we know, it’s not realistic. If people still want good roads, garbage collection, water services, they have to pay for it sometime.”

source: floridarealtors.org

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