Government Budgets And Taxes Are Interrelated

I intended to write about Stuart’s budget for the coming fiscal year. When delving into the numbers, I realized just how tied our budget is to the state’s budget, and, more importantly, to their encroachment on how we determine ours. Much of the governmental services we provide are predicated not only on what funds they allocate but what they permit us to do. The more controls that are placed on municipal government by Tallahassee, the less that municipalities can respond to the needs and wants of local citizens.

For the past 40 years, we have constantly heard that taxes are bad. Taxes in and of themselves are not bad. It is the way that government uses the tax money that is either bad or good.  The old accounting maxim, “value received and value parted with” should be what determines if a service is good or bad. There is no such thing as services being provided free of charge. Somewhere and somehow, everything must be paid by the taxpayer.

As taxpayers, we pay our taxes to a variety of governmental entities. About 35% of Stuart’s revenue comes from real estate taxes. The rest of our revenue is everything from grants to our proportionate share of the communication services tax and sales tax to rents collected from city-owned leased property.

The State of Florida keeps roughly 93% of the total sales taxes collected throughout the entire state. This amount comprises a little over 60% of Florida’s total revenue.  When there is a sales tax holiday, that really is a tax cut that the state mostly finances.

Tallahassee has another way to give “tax cuts” without using any state revenue. Every time the legislature and governor pass and sign a law that restricts local government’s revenue stream, they have in effect taken credit for a “tax cut” but not allocated any funds to pay for existing services. Local governments must still provide police, fire/rescue, roads and parks. We just have one less fiscal source to help pay for them. For example, by lessening the percentage of the communication services tax charged on phone bills, municipalities must find the money elsewhere to provide services.

Another bill that the legislature was so very proud of passing last session was a constitutional amendment for an additional $25,000 homestead exemption. If passed by 60% of the voters in 2018 (which seems likely), the legislators will be credited with a “tax cut” without any state funds being used. The result for Stuart will be about $160,000 less in revenue. Do we cut services or raise other fees and taxes because of Tallahassee’s largesse?

At the same time in the past several years, Tallahassee has cut back on the funds that it sends to us for roads, sewer expansion and other grants. They expect municipalities and counties to continue providing these services but limit the sharing of tax dollars, restrict the ways we can raise money and pass additional mandates. This cannot continue without municipalities cutting basic services.

What everyone needs to understand is that nothing is free. Isn’t it better for Tallahassee to stay out of our local affairs as much as possible, and let local government determine how revenue is raised to provide the services that their citizens want? The Legislature needs to stop interfering and begin listening. A legislative committee chairman from Panama City has no idea what a resident from Ocean Breeze needs or wants. Tallahassee should take less from our pockets and stop telling us what and how to provide for ourselves.