How Will We Pay? Diversifying revenues and lowering property taxes

Note: Changes would not take effect until fiscal year 2015.

EAST COUNTY — On the heels of a discussion about growth in Manatee County came another Jan. 15 workshop about how to pay for it.

Subjected to the whims of property values and their effect on taxes, Manatee County has dug into its reserve account, called the stabilization fund, for the last five years.

For fiscal year 2013, 60% of the county’s revenues come from property taxes. When taxable property values declined, Manatee County’s budget decreased by a third, said Jim Seuffert, Manatee County’s director of financial management.

In an attempt to diversify revenue and fund government with more fairness with contributions from a broader base of taxpayers, Manatee County will focus on two new revenue sources: utility franchise fees and stormwater fees.

The plan is revenue neutral, meaning the county doesn’t come out with more money.

It’s just about paying for government at its current size.

“If you diversify revenues, you don’t get hit as hard by dramatic shifts in the economy,” Seuffert said. “Lower property taxes will also help lure employers and spur economic development.”

Franchise fees are a traditional type of tax charged to utility companies for putting power lines or other facilities on the public’s right of way.

It’s a payback, of sorts.

Under the county’s plan, franchise fees would be charged to electric, gas, water and wastewater companies, but not telecommunication companies.

The utility companies’ added expenses are passed on to the consumer.

Seuffert says that most people living in a city — such as the city of Bradenton — pay a franchise fee or a public service tax on their electric bill now.

Sarasota County also pays franchise fees and stormwater fees.

Franchise fee revenues allow for a lower county-wide millage rate, to be adopted by the Manatee County Board of County Commissioners during the budget process.

A proposed franchise fee equal to 5% of utility bills will offset the property-tax reduction.

Seuffert projects the average home will see a $100 reduction in property taxes.

So, if you own a home, your property taxes go down, but you might pay a little more on your utility bill.
The second new fee, a stormwater utility fee, isn’t really new.

It covers the cost of maintaining the county’s stormwater-runoff system and is already charged to a person’s utility bill.

The change comes more from nuances.

Currently, there is no specific line-item on a person’s utility bill that goes to stormwater fees.

A line-item would be added as an assessment to a person’s property tax bill, while other line items are reduced.

The plan recommends that garbage rates move from the monthly utility bill to the property tax bill, as well.
Garbage rates would go down by the amount of the stormwater fee.

“There is no real impact on the residential customer here,” Seuffert said. “This is really about being more transparent and putting us in a position to get state grants.”

Without a line-item stormwater tax, a county can’t get money from the State Department of Environmental Protection for bigger stormwater projects, such as repairing and improving the system.

Manatee County simply wants to maintain its stormwater system.

Contact Josh Siegel at [email protected].

Click here to view unincorporated Manatee County FY13 budget for property tax-supported programs.