NEWS ANALYSIS

MARK SCHUMANN

Among nine Florida cities included in a recent benchmarking study, Vero Beach raised the second lowest in property tax revenue per resident.  Only one, Safety Harbor, raises less property tax revenue per resident.

Property tax revenue raised per resident:

1. Marco Island – millage:  1.9900; avg. per resident: $854

2. Cocoa Beach – millage: 5.0240; avg. per resident: $578

3. Dania Beach – millage: 6.1816; avg. per resident: $521

4. Maitland – millage: 4.2800; avg. per resident: $476

5. Punta Gorda – millage: 2.8186; avg. per resident: $427

6. Stuart – millage: 4.3329; avg, per resident: $415

7. New Smyrna Beach – millage: 3.4793; avg. per resident: $335

8. Vero Beach – millage: 2.0336; avg. per resident: $266

9. Safety Harbor – millage: 3.3808; avg. per resident: $178

In fact, Vero Beach’s average of $266 per year per resident is less than half the average of the nine cities included in the study.As the city prepares for the proposed sale of Vero Electric to FLorida Power & Light, leaders are looking for ways to close a budget gap that will result from the loss of millions of dollars now transferred each year from the electric fund to the general fund.  This money from the electric utility has helped to pay for services such as police protection, life guards, public works, and recreation.

For decades, Vero Beach has been able to keep its property tax rate low because the cost of city government has at least partially been paid for with earnings from Vero Electric.  These annual transfers have amounted to approximately six percent of electric system revenues, and 20 percent of the general fund.

Now that the city must prepare to get by without an annual infusion from Vero Electric, some, including Mayor Craig Fletcher, Vice Mayor Tracy Carroll and Councilwoman Pilar Turner, are proposing steep cuts in staffing and services.  Turner wants to cut 10.9 percent from the 2013/2014 budget. Fletcher would prefer to trim five percent a year for the next three years.  Though clearly an advocate of cutting the budget, Carroll has been less specific and not nearly as strident.  Councilmen Jay Kramer and Richard Winger, for their part, have shown no enthusiasm for further cutting services.

To put the proposed budget cuts in perspective, the city has already trimmed spending approximately 25 percent since 2009, and in the process has laid off some 100 employees.

An alternative to further cutting staff and services, of course, would be for the community to face the fact that the city’s property tax rate has been keep artificially low because of the ready access to revenue from Vero Electric.

To listen to Turner and Glenn Heran, President of the Taxpayers Association, city government not only was bloated, but remains so.  When Turner uses the benchmarking statistics, she compares the number of city employees per 1,000 residents.   Her comparisons are misleading, though, because she includes employees working in enterprises such as Vero Electric, the water & sewer department, the marina, solid waste and the airport.

Averages can be misleading, as can the use of statistics carefully selected to bolstering an argument or supporting a preconception.  For example, looking at the eight cities with which Vero Beach was compared, one might argue that there is room to lower Vero Beach’s property tax rate, since one other city, Marco Island, has a millage rate of 1.9990 compared to Vero Beach rate of 2.0336.  Marco Island, however, has a taxable property tax base of $9.3 billion, compared to Vero Beach’s $3.1 billion.  With a population of 16,413, then, Marco Island is collecting $14 million in property tax revenue compared to Vero Beach’s $4 million.