“Another tax increase is in the works” – An opinion

By Patti Clifford
July 12, 2020

Another tax increase is in the works for City residents and businesses. Last year at a budget workshop, I spoke out about the double whammy tax increase – the .5 mill for conservation on top of an 11% increase over the rollback rate for the “base” millage rate.

This year it is just a single whammy, but another tax increase none the less. If the millage rate “holds” at 5.8553, it will be advertised as a 10.2% increase over the rollback rate. Are you getting a 10.2% raise?

Comparable property values are up again, +6.4%. This means our millage rate should be going down. Additionally, the City has NEW properties valued at approximately $74 million that will be taxed for the first time in FY 2020/2021. At the FY 2020/2021 rollback rate, 5.31 mills, these new properties will generate and additional $377,000 in NEW taxes for the City (using a 96% collection rate). At the higher proposed rate, 5.8553, they will generate more than $415,000.

Some questions to ponder:
• How have we gotten here?
• When was the last time the City lived within its means (the rollback rate) and actually budgeted and collected taxes based on the rollback rate?
• Why is the rollback rate not enough?
• What will it take for City government to go back to the rollback rate?

Some thoughts:
• I remember a time when the City boasted of going to the rollback rate for six straight years. I believe that was more than six years ago.
• What happened in the General Fund during the past six years?
o Full time employees in the General Fund went from 139 in FY 2016/2017 to 160.5 in FY 2019/2020
o 2 hurricanes
o Numerous studies and surveys
• What can be done?
o Ask “What specific increases in services did we get for the additional 20 full time staffers in the General Fund?” Ask if the number of employees can decrease in FY 2020/2021. A hiring freeze perhaps.
o Can we do with fewer vehicles? Can we postpone purchasing some vehicles?
o Are there capital projects that can be eliminated from the Five-Year Capital Improvement Plan?
• Are there other sources of revenue the General Fund can generate and take some of the tax burden off residents and our businesses?

What can YOU do?
• Email or call the City Manager and the Commissioners tell them the years of tax increases needs to STOP.

Editor’s Note:  Patti Clifford retired as Comptroller for the City of Fernandina Beach in 2018.

22 Comments
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mike spino
mike spino (@guest_58265)
3 years ago

How much more would the proposed millage rates cost a home owner with $100,000 in assessed value?

DAVID LOTT
DAVID LOTT(@dave-l)
3 years ago
Reply to  mike spino

Mike, death from a thousand paper cuts. One can seek to minimize any tax increase by breaking it down to small increments. How many property owners have a home at only $100,000 in assessed value? I am sure we will hear the tax increase proponents say, “well it’s only XX cents per day. Isn’t that worth it?” To answer your question, if my math is right the difference of .5453 mills between the rollback rate and the current budget millage would be $54.53 per $100,000 in assessed value – or only 15 cents a day.

The reality is the question should be what is the justification for an increase? As noted, with the increase in property values, the City is already looking at an increase of more than $375,000.

Mike Spino
Mike Spino (@guest_58285)
3 years ago
Reply to  DAVID LOTT

So $50 bucks per $100,000 of valuation. I’m having a hard time getting worked up over this. The lion’s share of the city general fund budget is police and fire. We’re not going to cut that. What are you going to cut? $50 bucks. Stop wasting my time.

Dave Lott
Dave Lott(@dave-l)
3 years ago
Reply to  Mike Spino

Mike, according to Zillow the median market value of a home in 32034 zip code is $381,458. Average assessed value is 75% of market value, so that brings it down to 286,093 so incremental tax increase is roughly $143. Maybe a waste of your time, but to the people struggling to make their house or utility payments, it is a big deal. As I said originally, death from a thousand paper cuts.

Mike Spino
Mike Spino (@guest_58289)
3 years ago
Reply to  Dave Lott

Stop wasting my time. Market value has nothing to do with the assessed value of taxes being paid. I understand the net/net on the proposed tax rates is actually a decrease.

Dave Lott
Dave Lott(@dave-l)
3 years ago
Reply to  Mike Spino

Mike, is that the new math you are using? Perhaps you should spend some time on the Nassau County Property Appraisers website which is where the citation of the average assessed value being 75% of market value came from. Yes, an average is an average and one’s own tax amount will vary based on a number of factors, but it is evidently a good rule of thumb if cited there. Chill my friend.

Bruce Smyk
Bruce Smyk (@guest_58293)
3 years ago
Reply to  Dave Lott

Dave, you have more patience than I do. Anyway, with the City officials wearing financial blinders to the economic plight of many of its property owners, what is its incentive not to spend as it wants? The election of commissioners? I am not sure the commissioners all understand what’s in the budget. They follow the bullet points they are hand-fed.

Frank Quigley
Active Member
Frank Quigley(@frank-quigley)
3 years ago

We have seen many “reasons” for the increasing taxes. This includes that the island community we live in is pristine, that the city’s downtown charm is maintained, the beaches are kept clean and services are at a high level. This is all true, and services are good.

But the growth rate of City income from taxes and fees has surpassed the growth of the City’s population and of household formation. Why is this? Has the rate-of-response among our safety departments measurably improved? Is the rate and quality of response by the zoning department or building department measurably improved? Is the level of sanitation service measurably improved? What metrics are used to justify increased taxes and spending? 

The COVID recession and long-term prospects for the regional economy are not clear and possibly very negative. How can the City justify having already-stressed working-class families’ burdens added to?

Time to put this “just raise taxes” momentum to an end. 

Mark Tomes
Trusted Member
Mark Tomes(@mtomes)
3 years ago

I am certainly not a fan of tax increases, but one expense that has not been mentioned is a cost of living increase for the workers in the city. Inflation happens, and cost-of-living adjustments rarely keep up with inflation, meaning salaries and wages effectively are cut each year. Hopefully, adding some money in the budget will also add money to our local workers‘ pocketbooks. Finally, comparing a 10% millage increase to a 10% raise is misleading. They are on totally different scales.

Jack Knocke
Jack Knocke (@guest_58275)
3 years ago
Reply to  Mark Tomes

Mark,

The city is not just baking in a cost of living increase. They have added many new positions over the years, (including last week), they are promoting people with no change in responsibilities, and growing staff when they have outsources serviced which should have actually reduced staffing levels. There seems to be no motivation to drive efficiencies so that we can do more with the same people – and justify promotions, increases and job enrichment. In addition, after adding an arborist position they now propose to buy him a new car. It just keeps growing.

Tom Smith
Tom Smith(@tom-s)
3 years ago

This article is spot on. It is time to hold our elected officials accountable. It is not their money and we have choices. It is time to make some serious cuts.

Perry Anthony
Perry Anthony (@guest_58270)
3 years ago
Reply to  Tom Smith

Yes Tom, “ACCOUNTABILITY” of our elected officials is exactly what we need now more than ever. That is just the beginning of solving our issues at hand.

bob carter
bob carter (@guest_58271)
3 years ago

thanks.

We are always told that growth will pay any tax increases for us, and that should be correct, yet taxes keep going up. Pensions and high salaries for senior staff could play a part too.

I objected to a tax increase, and was told, “Don’t you want your family to be safe, and have emergency services available?”

What has that go to do with higher taxes? Not much, those are already paid for at the current tax level.

Marie Hargis
Marie Hargis (@guest_58272)
3 years ago

NO TAX INCREASE! ENOUGH! STOP the ridiculously high taxes & the assault on our island from OVER-developement. The city needs to STOP its frivolous spending starting with them continuously throwing away money on expensive studies for useless information & recommendations that are NEVER followed. And, what happened to the mosquito control we are paying taxes for?

Jack Knocke
Jack Knocke (@guest_58274)
3 years ago

Patti,

Thanks for the insightful, fact based analysis regarding the budget and taxes. You are well respected in our local community having been the City Comptroller. I’m disappointed that one city commissioner in particular, Chip Ross, has positioned a flat budget (using the rollback rate) as a tax decrease causing a reduction in services. We need all of our city commissioners to seriously consider the financial impact the recent and proposed tax increases have had on our community. Stop the careless spending and focus on efficiencies and cost savings to maintain the level of service consistent with last year with the same funding.

Jack

John Martin
John Martin (@guest_58276)
3 years ago

Patti Clifford is spot on. Expect Nassau County BOCC to do the same. You would think that if the Rollback Rate isn’t on their radar, at least lower the Millage Rate by the same percentage as the increase in accessed home values.

DAVID LOTT
DAVID LOTT(@dave-l)
3 years ago

While the new budget doesn’t go into effect until October 1, now is the time to adopt a program of austerity with regards to current city and county spending as well as planning for next year’s fiscal year. While property tax revenue for the current fiscal year is well in hand, sales/gas and other monthly tax revenues have dropped dramatically due to the pandemic and its impact on the local and national economy. On the island, many of the workforce have seen their jobs furloughed or lost while businesses are fighting to survive. The retired have seen the value of their retirement investments take dramatic losses which will impact their withdrawals for their monthly income.

There is no way to forecast the short-term economic outlook as there are concerns about a second wave and the potential for shuttering of businesses again. Now is the time to be frugal and plan for the pessimistic scenario.

Al MacDougall
Al MacDougall (@guest_58287)
3 years ago

Since the City Manager and City Commissioners seem unmotivated to find cost savings, perhaps a small panel of local experts should be formed to take a “deep dive” into the various expense categories and report a list of recommendations to the Commission. Perhaps Ms Clifford would consider chairing such a working group. Without outside help change seems an impossible goal.

Ben Martin
Ben Martin(@ben-martin)
3 years ago

There is a move across the country for states, counties, and municipalities to create their own public bank. The profits go to the community. It sounds a lot like socialism but North Dakota has a public state bank and they are a very conservative state. More revenue and less tax makes things better.

Dave Lott
Dave Lott(@dave-l)
3 years ago
Reply to  Ben Martin

Ben, the public bank in ND was established way back in 1920 when the state was a virtual desert of financial institutions due to its low population. The state bank was created to support agriculture loans for farmers in the state. At the same time, the state also created a state mill to support the wheat farmers that still operates today. However it should be noted that the state bank’s primary source of revenue comes from participation loans where they partner with a regular financial institution to fund the loans.

One must ask though, is this really a proper function of government?

Ben Martin
Ben Martin(@ben-martin)
3 years ago
Reply to  Dave Lott

Public Banking works very well in North Dakota. The 2008 financial crises hardly affected them. Public Banking is being implemented/investigated by various public entities across the nation. We have a privately held for profit banking system that is corrupt. Next time you are at the bank and want to have some fun, when the teller asks you if there is anything else they can do to help you – tell them – “Sure, I would like a tax payer bailout for my failed private business enterprise.” Anyone who wants to gain perspective on the Federal Reserve Banking System should read “The Creature from Jekyll Island.” It is endorsed by 10 term congressman Ron Paul. Perhaps the question we should ask is a monopolistic private central bank constitutional? Another question we might ask is – Why didn’t any of the 5300 Wells Fargo employees that created a million or more false accounts go to jail? Other questions are – How much wealth will be transferred to the banking system due to the false hysteria associated with Covid1984? How many Americans will lose their jobs, their homes, their business assets? Is it true the World Bank is a big funder of the WHO? Are the private central bankers in this country friends with the private central bankers in other countries? Is it like a club?

Al MacDougall
Al MacDougall (@guest_58295)
3 years ago

For the record, the 3 big expenses in the current budget are: Public Safety (police/fire) at 49%, General Government (city hall, permits, planning) at 24%, and Recreation (parks) at 18%. Transportation (fleet vehicles) is 8%.

Cutting taxes means cutting the three big pieces of the “pie”. Assuming Public Safety is sacrosanct, that leaves two, which together add up to $9.5 million, and Transportation which is $1.8 million, totalling $11.3 million.

Reductions have to come from these major line items.