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The money vat: Where it all goes

Local governments have lapped up the boom years, at a rate outpacing growth and inflation combined. Now everyone's taking stock, including us.

Published April 15, 2007

A closer look
Analyses of property taxes from county and city governments:
Pinellas | Hillsborough | Tampa

[Times photo: Chris Zuppa]
Hillsborough Community College Fire Academy cadets, from left, Ross Behnke, Justin Pratt and Vinnie Tricarico, all of Tampa, work train at the Tampa Fire Training Facility.

Across the state, Floridians have all but shouted: Give us property tax relief -- now.

State legislators responded by taking aim at the fatted coffers of local governments from Tampa to Tallahassee. They and Gov. Charlie Crist accuse governments of using record property tax gains for a spending binge, rather than returning the spoils to hard-working families. They are vowing to tighten the spigot.

With an overhaul of the property tax structure looming, the St. Petersburg Times examined just how five local governments - Hillsborough and Pinellas counties, and the cities of Clearwater, St. Petersburg and Tampa - have spent the public's money.

Without doubt, these have been flush days. Each government spent at a rate well outpacing its population growth plus inflation. They ranged from growing Hillsborough County, which spent $804.5-million in 2005, 65 percent more than five years earlier, to Clearwater, which spent 28 percent more.

Where has the money gone? To hire more police and firefighters. To boost salary and benefits for government employees. To shore up rainy-day funds. To staff parks and other amenities built with sales tax money.

For some, it's about the bottom line.

"Our local governments have become arrogant, and they have become powerful," said St. Petersburg's David McKalip, a representative of the Florida Taxpayer Alliance who will lobby in Tallahassee for reform. "They think the money belongs to them. Taxpayers are fed up."

Cities and counties say they're meeting residents' needs.

"Our spending has been very controlled," said Tampa Mayor Pam Iorio, and focused on "those services that the public wants, expects and demands."

As the money has flowed, some patterns emerge:

  • Government has taken care of its own. This year, the average Pinellas County employee will cost taxpayers an estimated $74,177 in salaries and benefits, up 55 percent over 2000. Hillsborough's payroll is projected to climb at a similar rate.
  • Public safety spending, a top priority for voters, has soared. Tampa added 103 hires to its Police Department over seven years. Of the extra $71-million St. Petersburg will spend this year from 2000, half has gone to police and fire protection.
  • Local sales taxes built parks and jails that needed workers, whose salaries come mainly from property taxes. In Hillsborough, a voter-approved sales tax helped pay for jail expansions in 2000 and 2005, fueling the need for more than 100 workers. The same tax helped build or expand 16 Tampa recreation centers, but didn't pay for their 112 employees.
  • After brutal hurricane seasons, governments have socked away millions in rainy-day funds. Clearwater's reserves more than doubled from 2000 to $20.5-million. Entering this fiscal year, Pinellas' reserves were up 284 percent.

Most governments do not precisely track how they spend property tax dollars. The Times examined spending in the general fund, which covers many day-to-day costs of government services and which includes a large contribution from property taxes.

Legislators pushing for reform say local governments have fed mercilessly on taxpayers' wallets.

"It's outrageous they have not limited their spending," said state Rep. Rich Glorioso, R-Plant City. "I know there are a lot of needs out there, but we can't keep taking money from the people and spending like they are."

Some city and county officials grant that the tax windfall has allowed unprecedented freedom. More needs and requests have been met than ever, they say. But more requests keep coming. And one person's "need" may be another's inexcusable waste of tax dollars.

"It goes back to the old saying that one man's fat is another man's lean," said Pinellas County administrator Steve Spratt.

The largesse has been fueled by a run-up in real estate values borne largely by those who don't benefit from the state cap on taxes for homesteaded property owners. The real estate market has allowed governments to keep tax rates flat or even lower them but still collect more cash year over year.

Now, lawmakers in Tallahassee are preparing to step in. House and Senate leaders have written vastly different proposals to reform Florida's property tax system, but the plans have one thing in common: Both would shrink the flow of tax revenue into city and county budgets.

The House wants to roll back tax revenues to what they were in 2000; the Senate wants to push them back to 2005. The two are only now beginning to meet to work out their differences, but everyone expects some kind of rollback to survive.

Rising costs

Local governments face some of the same challenges as private businesses - insurance, pension, utility and gas costs that are outpacing inflation. St. Petersburg is paying nearly triple the cost of property insurance for half the coverage it had in 2000.

"If you're going to roll back rates, roll back my expenses," said St. Petersburg internal services administrator Mike Connors. "Roll back my retirement expenses, my fuel expenses, my insurance expenses. Then we can talk."

But much of the spending falls in areas local government does control.

From 2000 to 2005, Hillsborough County doled out pay raises averaging 7 percent annually after studies suggested that salaries lagged behind other employers'. County administrator Pat Bean, along with commissioners, stopped the routine in 2006 after a salary survey showed that, when factoring in generous benefits, county employees weren't doing so poorly after all. Average raises fell to 5 percent.

"We are trying to make the point that you have to live within your means," Bean said.

All governments saw hefty compensation increases. The lowest were in St. Petersburg, where despite an infusion of spending on police and fire personnel, overall compensation costs rose 40 percent since 2000.

And all the governments spent an ever-growing share of their tax collections on public safety.

Pinellas County, for instance, poured money into its Sheriff's Office, adding 458 positions from 2000 to this year. Hillsborough's Sheriff's Office swelled similarly.

The vast majority of the Pinellas hires staff county jail expansions, though crowding remains a severe problem. The remainder went to police schools and new courtrooms and to beef up patrols. The human resources division added 10 positions to handle all the hiring.

Sheriff Jim Coats insists each new position can be justified: "We don't ask for frivolous stuff."

Fire stations popped up to better serve once-rural areas, with Hillsborough adding two a year.

But some spending wasn't to staff new stations. In 2003, Hillsborough commissioners agreed to give the firefighters' union more days off. That meant hiring 42 more firefighters - another $4-million a year.

Hillsborough County Fire Rescue Chief Bill Nesmith said firefighters previously were racking up overtime pay to cover all shifts, so the added days off were warranted.

Sales taxes in both counties made construction of new fire stations, not to mention parks, libraries and roads, possible. But property taxes pay for those who run and manage them.

Across the bay, the Penny for Pinellas sales tax paid millions for the Weedon Island Preserve Cultural and Natural History Center in 2002 and the Brooker Creek Preserve Environmental Education Center in 2004.

To run them, 10 positions were added to the county Environmental Management division. The hires helped push the division's staffing costs to a projected $9.4-million, a 109 percent hike since 2000.

Spending skeptics may call that extravagance, but not Joanne Kervin of East Lake. Kervin has brought her Boy Scout troop to the Brooker Creek education center and recently visited with family before heading into the preserve for a hike.

"This is a place where definitely tax money should be used," said Kervin, 39. "This area needs nature. I think it's worth it."

Ballooning reserves

Not all taxes coming in have been spent. Governments aggressively pumped cash into reserves for hard times, such as when hurricanes strike. Clearwater's reserves, now at $20.5-million, are roughly 16.8 percent of the city's general fund, nearly twice the 8.5 percent city law requires.

Hillsborough has quadrupled its operating reserves to $125.6-million since 2000. Pinellas has set aside even more.

Tampa created a dedicated hurricane fund in 2006 that is now $7.5-million. Yet Mayor Iorio looks on her sister governments with envy.

"Both Pinellas and Hillsborough counties have bolstered their reserves over the years," Iorio said. "The city of Tampa needs to do much more."

To Frank Miller of Tampa, reserves are places governments could cut.

"It's nice to have, but it's not really a necessity," he said. "When I need something for my house it's not because it's nice to have. It's because I need it. That's a lot of money to put away just in case."

Miller won't be here to test the need for reserves if a hurricane strikes. Rising property taxes have prompted him to move to Smyrna, Ga., in June.

Times staff writers Mike Donila, Alex Leary, Aaron Sharockman, and Janet Zink, and researchers John Martin and Angie Drobnic Holan contributed to this report.

About this story
The St. Petersburg Times set out to see how local governments have spent property tax dollars in recent years. Governments put property taxes into the general fund, a pot of money that pays for many daily government operations. Property taxes are a majority of the Hillsborough and Pinellas counties' general funds, and a growing portion for Clearwater, Tampa and St. Petersburg. Reporters looked at general fund spending from 2000 and 2005, the last year for which complete figures were available. Figures for 2007 are projections. Salary and benefit calculations were drawn in some cases from overall spending, not just general fund payouts.

[Last modified April 15, 2007, 05:41:08]

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