South Florida water managers avoid tax increase as they push for Everglades land deal
Sun Sentinel
2010-07-19
South Florida water managers avoid tax increase as they push for Everglades land deal
Sun Sentinel
By Andy Reid
07/15/10
Pledging no new taxes, South Florida water managers on Thursday agreed to keep the water district property tax rate unchanged for the coming budget year as they pursue a $536 million Everglades land deal with U.S. Sugar Corp.
A budget squeeze blamed on Florida's lingering economic downturn has jeopardized the proposed 73,000-acre purchase pushed by Gov. Charlie Crist as a way to fill in the "missing link" in Everglades restoration.
The South Florida Water Management District - which leads Everglades restoration - has long maintained it wouldn't increase the property tax rate to purchase the land. On Thursday, the board agreed to keep the tax rate where it's been since 1998, for the budget year that begins in October.
The rate is about 62 cents per $1,000 of taxable value for most of its 16-county region.
For a $230,000 home with a $50,000 homestead exemption, district taxes for residents of Broward and Palm Beach counties would be about $112 a year. Final approval of the tax rate comes in September.
District Board Chairman Eric Buermann has blamed "corporate opponents" of U.S. Sugar - referring to Florida Crystals - for claiming that the land deal will require tax increases.
"Nobody has ever seriously contemplated or discussed raising taxes," Buermann said Wednesday. "We all understand about paying taxes and spending taxpayers' money."
The continued drop in property values, due to the struggling economy, is projected to leave the district with about $61 million less in property tax revenues for the new budget year.
This comes as the district tries to pull off the still-pending deal with U.S. Sugar, while paying for its ongoing flood control and water supply duties.
The plan is to use U.S. Sugar land for reservoirs and treatment areas that could restore water flows between Lake Okeechobee and the Everglades. In addition to acquiring 73,000 acres, the deal includes a 10-year option to buy another 107,000 acres from U.S. Sugar.
The proposed deal allows U.S. Sugar to lease back much of the land, for $150 an acre annually, for as long as 20 years while the water management district phases in restoration construction.
During the two years since the deal was announced, the district's tax revenues and state funding dropped by nearly $300 million.
Environmental groups and other supporters call the blockbuster deal a historic opportunity to acquire former Everglades land drained through the decades to make way for agriculture. They envision capturing more of the stormwater now drained out to sea to avoid flooding and using it to replenish the Everglades and drinking water supplies.
"Our state water supply and the Everglades are priceless," said Cara Capp of Clean Water Action, who Thursday called on the district board to approve the U.S. Sugar land deal. "Protecting this vital resource should be our foremost priority."
Opponents of the deal, led by U.S. Sugar rival Florida Crystals and Miccosukee Tribe, contend that it costs too much and could drain funding from other overdue Everglades restoration projects.
Tea Party activists have dubbed the deal a bailout for U.S. Sugar, and on Wednesday more than 80 group members protested the deal at the South Florida Water Management District headquarters west of West Palm Beach.
"Even if they don't raise the [tax] rate, they are going to have to [borrow money]," said Marianne Moran, who helped organize Wednesday's Tea Party protest. "We don't need the land."
The U.S. Sugar land deal, two years in the making, already has been scaled back from the original $1.75 billion, 180,000-acre buyout first proposed by the governor. It could be headed for another downsizing or restructuring to allow it to move ahead.
A still-pending legal challenge now before the Florida Supreme Court could limit the district's plan to borrow money to pay for the deal.
If the Supreme Court or the drop in tax revenues limits the district's ability to borrow the money for the deal, the district could try to cover more of the cost with cash or reduce the amount of land it bus.
Cutting the deal down to 25,000 acres is one possibility.
The district's proposed $1 billion budget plan includes $321 million that could be used for buying U.S. Sugar property or for capital projects to address water-quality concerns.
Along with a continued decline in revenues, the district could be facing new costs to improve water quality.
Two federal judges this spring issued critical rulings about Florida's efforts address Everglades restoration and to meet water-quality requirements, intended to lessen pollution.
Even if the district gets the Supreme Court OK to borrow the money, it still can scrap the deal if the board decides it creates too much financial strain.
"The deal is going to be a challenge," Buermann said. "We don't know where we are going to go from here
