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Guest Column

Why encourage more spending?

First approved in 1989, the tax raised more than $800-million in its first 10 years, $1.3-billion in the second 10, and is forecast to raise $1.9-billion if extended another decade. It's up to voters on Tuesday to decide if it's worth the cost.

By DARRYL PAULSON
Published March 7, 2007

Penny for Pinellas 

Vote "no"

Enough is enough! After 20 years and $2.3-billion in additional taxes to pay for public projects, Pinellas County government and its 24 municipalities want another 10-year, estimated $1.9-billion extension of the Penny for Pinellas local option sales tax. This comes at a time when Florida property taxes have risen 80 percent since 2000.

Citizens across Florida, including Pinellas County, are demanding tax relief. Gov. Charlie Crist has made property tax relief a priority of his administration, and across the bay in Hillsborough County, the county commission voted to tie any increased spending of property tax revenue to inflation and growth. Why hasn't Pinellas done the same? Although Pinellas has cut the tax rate by .7 mill, it has not rolled back taxes to compensate for escalating property values.

If you hate "earmarks" and pork barrel projects that dominate Congress, then you really ought to hate the Penny. The Penny is nothing more than local pork. The county government will get $818-million if the voters approve the Penny again. St. Petersburg will get $355-million. Every one of the 24 municipalities is guaranteed enormous amounts of "free money." It is time for the municipal hogs to stop feeding at the trough.

The Penny encourages fiscal irresponsibility on the part of government. Instead of setting priorities to determine which projects are essential and must be done at once, which are desirable but can be postponed until the future, and which would be nice but are things we can live without, the unlimited resources from the Penny encourage governments to fund many more projects than they normally undertake. Every homeowner has to make tough choices about where to spend limited resources. So should local government. An example of how "free money" skews spending decisions: St. Petersburg City Council member Bill Foster suggested using Penny funds to improve Albert Whitted Airport because airport supporters are a "huge political machine" that could help the Penny extension effort.

In January 2001 the Pinellas County Commission had to cut $162-million from Penny projects because they had overextended themselves and not monitored Penny project cost increases. The response of county commissioners was surprise. Commissioner John Morroni described the overspending as a "shockeroo!" Isn't it comforting to know how effectively the commissioners conducted financial oversight? When was the last time you overdrew your checkbook by $162-million?

Among the questions every Pinellas resident ought to ask is why should they be forced to subsidize spending in the county's most affluent communities? Why institute a tax that is particularly cruel and burdensome to the low-income residents of Pinellas? Although the tax is a penny on everyone, low-income residents pay a much higher tax rate because they spend every penny of their disposable income; wealthier residents do not. Citizens for Tax Justice found that Florida's poorest citizens pay 14 percent of their income on taxes compared to only 3.6 percent for the wealthy. The reason for this is that Florida relies heavily on the state sales tax, which the St. Petersburg Times called "one of the most regressive forms of taxation" in a 1997 editorial.

Why is Pinellas the only one of Florida's 67 counties that needs an additional one cent sales tax for 20 years and is now requesting a third 10-year extension of the tax? Other counties have levied a half cent tax and some have levied a full penny. Pinellas stands alone in imposing the maximum tax for two decades and wants another 10 years and $1.9-billion.

Why did the Pinellas County Commission schedule the election in March when it will be the only item on the ballot in much of Pinellas County? There is abundant evidence that when there is only one item on the ballot, few people will vote. The turnout for the last Penny vote in 1997 was 23 percent, compared to a turnout of more than 60 percent in general elections.

Why do we need a third 10-year extension of the Penny when former County Administrator Fred Marquis said at the time of the second vote that there would not be a need for another extension of the Penny? He said that the county would have completed its projects and "quite frankly, I don't think we could reasonably spend the money." Why another 10 years and $1.9-billion? It is because governments will always find ways to consume all available resources.

We have already supported the Penny for 20 years to the tune of $2.3-billion. If you think taxes are high enough in Pinellas, vote no. If the pretty pictures of parks that are part of the Pinellas propaganda blitz do not easily sway you, vote no. Enough is enough!

Darryl Paulson is a professor of government at the University of South Florida St. Petersburg.

[Last modified March 7, 2007, 01:10:51]