County Commissioners Out of Touch with Critical Need to Increase Commercial Tax Base

Flagler County’s commercial tax base is currently less than 1% of total.

June 28, 2007 – Palm Coast, Florida – Flagler County Commissioners took their first shot at the 2008 budget. They missed the mark. They weren’t even facing the target. Just when we most need Enterprise Flagler and an empowered Industrial Development Authority, commissioners are reducing their budget and emasculating their mission.

For each dollar in tax collected from a residential property, local government provides eighty-eight cents of services. The same dollar collected from a commercial or industrial property requires only thirty-three cents of government provided services. Obviously, a commercial tax base is much more productive than a residential tax base. That is why we see states, counties, and cities compete with each other to attract and hold businesses. Businesses cost less per tax dollar and they provide jobs.

The average tax district collects about 17% of its revenue from the commercial and industrial sector. Flagler County collects only 0.8%. That’s not a misprint folks. It’s really less than 1%. We would need to increase our industrial tax base by 21 times just to be average.

Flagler County has two entities whose mission is to attract industry to our area, Enterprise Flagler and the newly created Industrial Development Authority. Enterprise Flagler is funded by the county, the city, and local businesses. Its mission is to promote the existing business community and to help them develop and expand. It also recruits new businesses to the area that enhances our growing community, targeting clean, high-tech businesses with salaries well above average, which Flagler County so desperately needs. But the commissioners have proposed severe cutbacks in their financial commitment to Enterprise Flagler in the preliminary 2008 budget; $88,750, down from $155,000 this year.

The main purpose of an Industrial Development Authority is to create funding options and incentives that attract targeted industries (the same people Enterprise Flagler is trying to attract). To do their job, they need to have authoriey and a mandate, responding quickly to meet requirements of potential incoming companies. Their main tool is the Industrial Revenue Bond. Industrial Revenue Bonds are typically used to acquire land and build infrastructure to support the needs of targeted industries. They are tax exempt, making them easier to sell at lower interest rates, thus reducing the debt service.

The commissioners can empower the IDA to move aggressively to issue bonds to purchase commercial and industrial land to be made available for incoming businesses. This is what our competitor cities and states are doing. But this council has not chosen to give the IDA any authority. They are keeping it for themselves. Unfortunately, they don’t have the vision or guts to make decisive moves. They will, in turn, put any development proposals to a public resolution. This in not the way to attract businesses.

Enterprise Flagler and the IDA strive to move Federal and State dollars down to the local level. Local tax payers benefit more when incentive monies are provided by the Fed or State. The business enterprise supports the local tax base without adding as much infrastructure and governmental services burden as residential growth.

We have a choice. Either we pay a little now via a well funded Enterprise Flagler and an empowered IDA or pay a lot more later on, when we find Flagler is only a bedroom community for St. Johns and Volusia counties. We won’t even have that many retirees any more. They won’t be able to afford to live here.

The total non-exempt valuation of assessed property in Flagler County has grown from $2.575 billion in 2000 to $10.903 billion in 2007. County commissioners plan to spend more on landscaping their new edifices than to attract the new industry we need to keep our residential property taxes in line. We need to wake them up to reality. We are facing uncertain funding in the future. We cannot predict what will come out of Tallahassee, but we do know that de-funding Enterprise Flagler is not only wrong, it’s stupid.

Call for action – Attend the next council budget meeting at 9:00 am July 11th at the county administration edifice on SR100 in Bunnell. Attend, and speak up. Tell them that a small investment in supporting our community’s sales ambassadors is an investment that you not only support but one upon which you insist.