A Millage (Tax) "Rate" Increase is Not a Tax Increase?

A Millage Rate Increase is Not a Tax Increase, A Millage Rate Increase is Not a Tax Increase, A Millage Rate Increase is Not a Tax Increase, A Millage Rate Increase is Not a Tax Increase….. If I keep telling myself this, maybe I’ll believe it. I have my doubts, though….

But I was very relieved (sarcasm) to find out that if the Escambia County School Board raises the millage rate (as seems to be the plan) for property owners in Escambia County this upcoming year, this will not be a tax increase. Nope, according to the Truth in Millage Law (TRIM)-it is not a tax increase—unless the amount of money generated from the millage increases. So, the plan is to raise the total millage from 7.72 mills last year, to 7.86 this year. This amounts to a .14 mill increase, but this is not a tax increase I’m told (repeatedly) because the tax roll in Escambia has, for only the second time in 22 years, shrunk. The tax roll shrunk 3.59% from where it was in 2008. So, it will be recommended that we increase the millage rate so that we get essentially the same amount of money from taxpaying property owners that we got last year. And our millage rate will subsequently be the second highest in the State of Florida, the second highest of 67 counties. (There is an extremely meticulous explanation for this, but trying to comprehend it is tougher than Chinese arithmetic!) No wonder our local Economic Development efforts are struggling! People like low taxes on property—not high taxes!

While I understand why the finance department and the superintendent want to raise the millage rate, I still feel uneasy about doing so. Most of the employees that control the budget process are long-term employees of the district. I believe, to a certain extent, that these long-term employees are somewhat removed from the economic realities faced by average non-government employees, taxpayers, and business and property owners of Escambia County. I say this not to denigrate these people, but only to illustrate why it seems so rational to these individuals to strongly advocate for increasing tax rates during this recession, the worst one we’ve faced as a nation in generations. The average small business owner in Escambia County has seen his costs increase, and his revenues decrease. Many taxpayers in Escambia County are seeing their hours cut, their jobs eliminated, their businesses go bankrupt, and many are struggling to keep up. People are losing their homes, and unemployment nears 11% locally. Driving through parts of town, the number of shuttered businesses and abandoned commercial properties is alarming, and the problems seem to be getting worse. For every business that closes, for every home foreclosed upon/abandoned-- that equals less taxpayers and tax revenue coming into the coffers of local government and schools. The solution? Increase the “rate” of taxation (millage) to get as much or nearly as much as you did the previous year from the remaining (surviving) businesses and property owners?? I have serious concerns about the sustainability of that mentality and taxation model long-term. People feel overburdened now, and absent an economic recovery for the next couple of years, things will get worse.

I do not intend to support raising the millage rate on responsible Escambia County property owners. If the property rolls have contracted modestly, then the taxpayers should realize a similar leveling off or decrease in their taxes. I will probably be on the bottom of a 4-1 or 3-2 vote, but I just do not feel that raising the millage rate right now, when everyone is stretched to the breaking point, is sound financial practice. Governments cannot tax their way out of a recession or tax their way back to recoup budget shortfalls—it simply does not work long term. I realize that our budget from last year at this time to now has been slashed by over 30 million dollars, and I think as a district we have done an outstanding job of managing these steep revenue declines. I believe we need to continue to cut, and to hold our millage rate steady at last year’s level of 7.72 total mills. The difference between keeping the millage rate at last year’s level and raising it now comes to just a hair over $2 million dollars. We have come so far, we have cut so much, we have closed schools, we have streamlined transportation, we have adjusted school start times, we have been excellent stewards of the taxpayer’s money—and I want us to continue this work. We can find the $2 million dollars in this budget, hold steady, and leave the “rate” of taxation flat.

In yesterday’s budget meeting, I proposed three potential solutions for finding this $2 million dollars.

Option 1. We can use the $2 million dollars is state compression funding (not yet budgeted) we receive from the .250 mills tax swap to make up this amount.

Option 2. We can do an expedited re-allocation of the 2003-2007 ½ Cent Sales tax fund carryover (Projected to be more than $23 Million), to identify qualifying projects that will alleviate a minimum of $2 million dollars from the Capital Budget.

Option 3. We have recently closed sales on three excess school properties: Wedgewood Middle, Brownsville Middle, and the Molino School. The sales proceeds of these three properties exceed $4.6 Million dollars. We can pull $2Million from this $4.6Million.

There are options to raising the millage rate. I will thoroughly explore all of them and advocate for them rather than asking weary taxpayers for this amount. It’s the right thing to do, and represents us as a body of government sharing the acute economic pain and not taking the path of least resistance by raising tax rates.