I am one member of a five person board. The opinions I express on this forum are mine only, and do not necessarily reflect the views or opinions of the Escambia County Staff, Administrators, Employees, or anyone else associated with Escambia County Florida. I am interested in establishing this blog as a means of additional transparency to the public, outreach to the community, and information dissemination to all who choose to look. Feedback is welcome, but because public participation is equally encouraged, appropriate language and decorum is mandatory.

Tuesday, October 17, 2017

What are the Economic Consequences for the BCC if the Beach Property Tax Decision Stands?

Escambia County is holding $9.8 Million Dollars in escrowed tax proceeds from Beach Leaseholders--and will return this money to taxpayers if the recent ruling from the DCA stands

Some Pensacola Beach Condominium owners were happy with last week's decision from the 1st District Court of Appeals--because the decision sided with their cause;  they will not have to pay ad valorem taxes on the property they lease--only on the improvements made to the leased land--if this decision stands.

The story was covered extensively by the local media.

News outlets have also reported, and I have confirmed with reliable sources, that this decision will be appealed by the property appraiser.

But what are the economic consequences for the BCC's budget  if the beach tax decision stands for Escambia County (Pensacola Beach) lease holders?

I have asked the question of staff and have been told that we (Escambia BCC) have escrowed the funds that were subject to this decision for the last five tax years, 2011-2016, in the event that the monies collected have to be returned to these lease holders.

Currently, the county holds roughly $9.8 Million dollars in reserves for repayment of these tax remittances--if the court upholds the DCA ruling and we are ordered to refund the monies collected.

Although it is difficult to ascertain the exact financial impact the decision would have if it stands--I am told that it would be safe to estimate the reduction in tax collections for the county going forward to be between $1.2-$2.2 Million dollars yearly.....

But everything remains in limbo for the time being and until such time as all the appeals are settled.  And we will keep escrowing these funds as we collect them-- in the event that we have to return them at some point down the line.


Bill Ray said...

Thank you for giving context to this news story...something the local media has not done as of yet. I am perplexed on why Chris Jones would continue to appeal this decision - and at what continued cost to the taxpayers. $2 million is a LOT of money, but it's less than one half of one percent of the current annual budget. That, coupled with the fact that he has given everyone else on the beach EXCEPT condominiums a tax correction based upon the previous court decision, makes his decision to not accept defeat in this matter curious. Am I missing something?

One more thing, would the .5% be an overall reduction to everything being funded in the county budget, or would the $2 million be targeted from certain county agencies and not others?

Jeff Bergosh said...

Bill--we are discussing this right now in our meeting, the overall beach issue as it pertains to leases, etc. I just threw an idea out; not sure if it would be good or bad, but since we know the taxation of beach properties in Santa Rosa County is lawful (I know the Judge on the Accardo case, the one that was upheld at the DCA and the Florida Supreme Court) because all leases on the Santa Rosa county renew automatically which is tantamount to "ownership" --But what would happen if the BCC through the SRIA made an ordinance that all leases in Escambia County at the Beach shall now and forever in perpetuity be automatically renewing (like the ones in Santa Rosa County). It Escambia did this, we could tax all leaseholders in Escambia County because we know from Accardo this would be legal to do--because leases that automatically renew are for all intents and purposes equivalent to "ownership" for taxation purposes. Not saying such a move would be popular or that it would happen or could happen--but it seems it would put the current strife to an end, legally, once and for all......