Special tax districts with power to tax at risk of cuts
Palm Beach Post Staff Writer
Updated: 11:23 a.m. Monday, Sept. 19, 2011
Posted: 9:59 p.m. Sunday, Sept. 18, 2011
Fresh from cutting $210 million in taxes and scores of jobs at Florida's water management districts, Gov. Rick Scott is sizing up a new target in his drive to shrink government.
The rest of Florida's more than 1,600 special districts, and the $15.5 billion in taxpayer money they command, are suddenly in Scott's cross hairs.
"I was shocked that it was $15 billion," Scott said last week of district revenues. "On behalf of the citizens of the state, we have to look at what return we're getting for those dollars."
The little-understood agencies trace their roots to log-cabin Florida and provide a variety of environmental, health care, community development and other services. Palm Beach County has 94 special districts, among the most in the state.
Critics deride special districts as "shadow governments" that burden Floridians with taxes, fees and costly bond issues to finance big projects. Members of the tea party movement, an influential supporter of Florida's Republican governor, have grown increasingly wary of districts' authority.
"The tea party is looking at every avenue of government to reduce taxes," said Rep. Mike Weinstein, R-Jacksonville, leader of the legislature's Tea Party Caucus. "Special districts will be a continued area of interest. They're not going away."
Weinstein, a former chief financial officer to two Jacksonville mayors, concedes that lawmakers could be hard-pressed to devise a simple plan for reducing the size, scope or services of special districts.
"But we've got to find ways that we can grab hold of them," he said.
Review panel appointed
Florida's 32 hospital taxing districts, scattered around the state since the 1920s, already are drawing scrutiny.
Scott appointed a 10-member Florida Commission on Review of Taxpayer Funded Hospital Districts this year, which could spark legislation changing how public hospitals and their districts operate in the state.
Unlike Broward County, which has two large hospital taxing districts, Palm Beach County has none. Instead, it has a voter-approved health care district, which has taxing authority and provides indigent care countywide.
Although hospital districts are drawing heat, the chairman of Scott's commission, Florida TaxWatch President Dominic Calabro, said the Palm Beach County Health Care District may be a model for the direction hospital districts should move.
"That seems like the best way to provide health care to those in need," Calabro said. "Not helping a public hospital beat back competition by providing it with tax dollars."
Scott, former chief executive officer of one of the world's largest for-profit hospital companies, Columbia/HCA, didn't name a public hospital representative to the commission created this spring, although he did name Dwight Chenette, who was the county health care district's chief executive at the time but resigned to become vice president of Blue Cross and Blue Shield of Florida's new Medicaid insurance line.
Push from tax watchdogs
Signs are that the commission's anticipated year-end report won't be friendly toward existing districts.
Calabro's TaxWatch two years ago released a stinging report that echoed an earlier state House assessment. Hospital districts, which then levied almost $600 million in property taxes, successfully pushed the legislature to "amend their charters to give them all the advantages of a private corporations without actually becoming one," a House study concluded.
Hospitals and advocates for environmental programs, services that took big funding cuts in the state's $69 billion budget this year, acknowledge that another round of cost-cutting could be in store next year if special districts are revamped.
"We're watching very carefully what's being discussed for hospital taxing districts," said Tony Carvalho, president of the Safety Net Hospital Alliance of Florida, which includes several of the state's large public hospitals.
Voters and district taxes
In a speech this month to the Economic Club of Florida, Scott was quick to condemn all forms of districts. He concentrated on the $15.5 billion they control, saying, "That's a lot of money. And there's not a single voter who gets to vote on what these tax rolls should be."
He's wrong about that. Some districts are led by appointees of the governor or other boards. But others are run by county or municipal commissions, and many have supervisory panels elected by property owners within the district's boundaries.
"The governor is categorically wrong when he says voters don't have a say in how special districts are run," said Terry Lewis, a West Palm Beach lawyer who has served since 1980 as general counsel to the Florida Association of Special Districts.
Lewis said that over the past three decades, special districts periodically have come under fire, often because of a sour economy, scandal or criticism of a free-spending district administration.
"But it's like Kabuki theater," Lewis said. "It's a set piece. There are claims that special districts are 'shadow government,' that they operate out of the sunshine. Then people look into it and usually there's no truth.
"We have to debunk the accusations," Lewis said. "And it looks like that's where we are again."
Scott made good on his first shot at special districts, and it was a big one - water management districts. He signed legislation this spring that sharply reduced tax money flowing to water managers across the state, leading to layoffs, a freeze on land-buying and a revised focus on what his administration calls the districts' "core mission."
Water-district slashing
Florida's five water management districts were required this month to bring their budgets before state lawmakers for approval - a first, also included in the legislation.
Some say other types of special districts might get similar treatment from next year's legislature.
Lawmakers might look to require districts to share research, staff and services in an effort to save money, or possibly limit their authority to issue bonds, critics said.
Provisions also could be enacted requiring districts to go before the communities they serve - most likely on a ballot - to gauge whether they should continue to operate.
"These districts do provide services that are close to the people," said Weinstein, the Jacksonville Republican.
"That's fine. But there's also something to be said for not borrowing, and paying as you go."
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