This is the second of two installments on the two questions on the June 18 Manatee County ballot.
Last week in this space, we presented the context for how and why the referendum question on the indigent-care, one-half-cent sales surtax came into being. In the end, we concluded this question has so many connecting parts that are necessary to fall into place to achieve the sales pitch — i.e. lower property taxes — that it’s too complex for taxpayers.
It’s not that taxpayers are incapable of understanding it; that would be an insult. To the contrary, they are are smart enough to be skeptical of any government ballot item that hinges on trusting elected officials to carry out a promise in the future.
In this case, many voters rightly have tuned in to such comments as: If the half-cent, health-care sales tax is approved, this will give county commissioners the impetus to consider reducing property tax rates. In other words, give us more money now, and we’ll consider lowering your taxes later.
Given the trifecta of government mistrust in Washington (Benghazi, IRS and trying to criminalize reporters), you have to believe large swaths of voters are in no mood to believe any government that says: “Trust us.”
To be sure, the political climate doesn’t help the sales-tax proponents’ cause. But as we said, the complexity of the issue, not the political climate, is the problem here.
Manatee County Administrator Ed Hunzeker, author of this referendum question, has good ideas for figuring out how replace the county’s soon-to-be-depleted health trust for indigent medical care. And he has good ideas for figuring out how to lower Manatee’s general millage rate with an assortment of user fees. In the end, his plan is to be revenue neutral, with the funds coming from a wider variety of sources than primarily the property tax.
But rather than sell the indigent-health-care sales tax as also a property-tax reduction measure, taxpayers would be more likely to embrace Hunzeker’s plan if each item were considered separately. Voters would be better able to digest each step.
As the sales-tax question and Hunzeker’s strategy is proposed, all of the subsequent steps remind us of any legislation that is pitched as “comprehensive reform.” Like Obamacare. It typically is loaded with costly unintended consequences.
But what about Manatee’s poor? How will they obtain medical and mental care if the sales-tax is rejected?
Sure, we have read and heard the pleas from the providers of those services that are likely to lose funding. They see crises looming.
But we also see this part of the issue as a test for county commissioners and the community.
The issue here is unless the half-cent sales tax is approved, the $9 million annual contribution from the county’s health trust to treat the indigent will go away by 2015. What money, if any, will fill that void?
Will county commissioners raise taxes? Will they cut funding elsewhere in the budget? Or will they let other sources and providers fill the vacuum? The ultimate question Manatee taxpayers should confront is whether taxation is the best way to address indigent health care.
We believe not, for a variety of reasons:
Whenever a good or service is offered for free, it is abused and overused. Indeed, contrary to belief, medical care is not a right or an entitlement; it’s a limited resource. It should be dispensed as such, with two parties — patient and doctor, or patient and provider — agreeing voluntarily on the value of that service. This is what we do with food, another necessity. This is the way it should be in health care; it should not be controlled by government.
Furthermore, people respond to incentives. Free, taxpayer-provided medical and mental care creates no incentive for the users to change behavior. Of course, we know not all indigent users of these services are capable of changing behavior. Still, many are. Health care cannot be forever free.
Finally, America’s not-for-profit charitable and religious organizations that administer to the poor are far more efficient and effective than any government-sponsored or managed program. What’s more, when these services are left to charitable organizations, donors have the option to give and direct their money where they want it to go. That’s better than the government deciding winners and losers — and taking their slice of the money to fund their bureaucracies.
Although the indigent health-care ballot question may seem simple on the surface, it’s fraught with too many implications. We recommend Manatee voters reject the half-cent tax. As harsh and heartless as it may sound, let market forces address the loss of the funds from the county’s health trust. The market is always more effective filling a vacuum than is the government. At the same time, we urge county commissioners to address the issue of property taxes versus fees separately from indigent health.
+ On question 2: incentives
Manatee County business leaders won’t like how we state this, but here are a few other ways to look at the second question on Manatee’s June 18 ballot:
• Should the County Commission be allowed to give special property-tax breaks to new or expanding businesses — if the businesses create or add jobs?
• Or, put another way, should the commissioners be allowed to subsidize new or expanding businesses, via property-tax breaks, at the expense of everyone else — so long as the businesses create or add new jobs?
• Or, to put it still another way, should commissioners be allowed to pick winners and losers?
Our guess is most voters’ instinct is likely to answer “no” to these questions. Americans have a strong disdain for special interests. And yet, we create them all of the time.
Here are the arguments you hear in support of giving the commissioners this “tax-abatement” authority:
Manatee commissioners need this authority so the county can be competitive in the national and state economic-development arenas. As the county’s economic development and chamber of commerce officials will tell you, Manatee County is the only county in the Greater Tampa Bay region that does not have this economic-development “tool” available to recruit and help expanding businesses. And as a result, the county loses out to many companies and businesses considering relocating or expanding. This is hurting Manatee’s economic attractiveness.
Proponents also argue that granting these “tax-abatement tools” produces a justifiable return on investment. They say the economic multipliers far outweigh the cost of the property-tax subsidies.
Instinctively, this sounds right: What’s a small tax break if it means a particular business will hire 10 or 20 more employees that it otherwise might not? Those new employees buy homes, cars, groceries, insurance, medical services and on and on, fueling still more growth in the local economy. And as the size and value of that subsidized company grows, when its tax break ends, it will be paying more taxes than it otherwise would have been if it didn’t receive the tax abatement to help it grow.
What’s more, the argument goes, tax-abatements are a fact of life in economic development circles. Everybody does it. Manatee, the argument goes, must stay competitive.
To paraphrase the late eminent economist, Milton Friedman, seldom is the other side of this coin considered. As Friedman explained many years ago to Forbes magazine, when governments give tax breaks and subsidies to businesses, government officials are assuming the new jobs that those subsidized businesses promise would never be created by anyone else.
To the contrary, Friedman said. Who is to say Manatee County’s other businesses and taxpayers would not create the same number or more jobs than the subsidized business if existing taxpayers were able to use the money that is taken from them to subsidize the new business?
In a perfect world, which, of course, is a dream, all cities, counties and states would discontinue their corporate subsidy programs. Instead, they would compete on what they should really focus, which is creating the right economic climate — low taxes and low regulation. Get out of the business of creating special interests.
While this newspaper has always been a strong proponent of business and economic growth, we have always opposed business tax breaks in the name of economic development. We still do.
Nonetheless, it won’t be catastrophic if Manatee voters give commissioners the authority to offer businesses tax breaks. But here’s the catch: Any business that is awarded a break must be held accountable.
MANATEE BALLOT QUESTIONS
1) INDIGENT-CARE ONE-HALF CENT SALES SURTAX FOR HEALTH CARE SERVICES TO QUALIFIED RESIDENTS
Shall Manatee County levy a countywide one-half-cent sales surtax for a 10-year period commencing Jan. 1, 2014?
The proceeds of the sales surtax shall be used to fund health care services for Manatee County residents, including elderly persons and children, who are indigent or medically poor. Such services shall include primary and preventative care by physicians, clinics, hospitals, mental health centers and alternative delivery sites in a cost-effective manner.
2) ECONOMIC DEVELOPMENT AD VALOREM TAX EXEMPTIONS
Shall the Board of County Commissioners of Manatee County be authorized to grant, pursuant to Section 3, Article VII of the State Constitution, property tax exemptions to new businesses and expansions of existing businesses that are expected to create new, full-time jobs in the county?
ARTICLE VII, SECTION 3, Florida Constitution:
(c) Any county or municipality may, for the purpose of its respective tax levy and subject to the provisions of this subsection and general law, grant community and economic development ad valorem tax exemptions to new businesses and expansions of existing businesses, as defined by general law. Such an exemption may be granted only by ordinance of the county or municipality, and only after the electors of the county or municipality voting on such question in a referendum authorize the county or municipality to adopt such ordinances.
An exemption so granted shall apply to improvements to real property made by or for the use of a new business and improvements to real property related to the expansion of an existing business and shall also apply to tangible personal property of such new business and tangible personal property related to the expansion of an existing business.
The amount or limits of the amount of such exemption shall be specified by general law … The authority to grant such exemption shall expire 10 years from the date of approval by the electors … and may be renewable by referendum as provided by general law.