New taxes promote new spending
To the editor:
At the Committee of the Whole meeting, Monday, March 2, various fees and taxes were discussed. The main problem with new additional sources of revenue is its tendency to promote greater spending. With each new source of revenue there should be a mandated dollar-for-dollar reduction in property tax revenue. The city’s recent history discloses that when the city had a large inflationary increase in property values in fiscal years 2006 and 2007, the administration proposed and the council adopted a 60 percent increase in the general fund budget in just over those two years. A second assistant city manager was hired and city personnel substantially increased. In the following years the city undertook buyouts to reduce the number of employees paying up to four additional years of pension to induce employees to take the buyouts.
Another example of the city’s desire to increase spending based on the availability is the administration’s opposition to amendment to Section 7.09 of the city charter. That amendment would have required the city to hold the surplus revenue in the general fund that exceeds all budgeted appropriations and apply those surplus monies to the following years budget except for an emergency appropriation. That surplus revenue is on average 5 percent of the general fund budget and occurs because the city must underestimate its property tax revenue to ensure that there will be no shortfall. On a general fund budget of $150 million that surplus would be $7.5 million. Today that surplus revenue is not required to be held and applied on the following years budget. The past liberal spending of the city occurred each budget period from 2002 to 2005. When I insisted that the rate of increase in general government operations budget be limited by the combined rate of increase of growth and inflation the administration said that “it had no relevancy to the general fund budget” and regrettably a majority of the city council agreed with the administration. When former Sheriff Shoap offered to return Lee County deputies as school resource officers in the Lee County Schools the city administration did not support it. While other cost savings have not been championed by the administration it serves little purpose to recite them all except to point out when revenues were available conservative measures were not employed. It therefore now defies both fact and reason to believe that new additional sources of revenue will provide the property tax relief it should unless a restraint is imposed.
A proposed restraint would be to provide a section in each new tax or fee ordinance the following:
This Ordinance and the taxes or fees created or imposed therein shall become null and void and shall terminate forthwith upon the adoption of the city’s general government operations (general fund) budget, as made up, composed or constituted at the time of the adoption of this Ordinance, is increased from the prior years annual budget at a rate that exceeds the combined rate of increase of growth and inflation. Rate of growth increase shall be the annual population increase as determined by the business school at the University of Florida at Gainesville, Florida. Inflation shall be the CPI set forth annually by the Bureau of Statistics of the U.S. Department of labor for the area of Tampa/St. Petersburg, Florida. This termination of the taxes or fees and the voiding of this ordinance shall not occur if the increase in the annual general fund is because of an emergency not caused by the city.
Arnold E. Kempe
Cape Coral