TaxWatch sells research work

The organization says it has to charge for its research projects because its budget doesn't cover its expenses.

By DIANE RADO

© St. Petersburg Times, published August 2, 2000

TALLAHASSEE -- For years, Florida TaxWatch has carried a big stick in Tallahassee as a credible, independent voice on tax policy and questionable government spending.

It turns out that some of the organization's services are for sale.

The non-profit group recently solicited business from Jacksonville officials, offering a "valuable study" that would help voters understand the benefits of a $2.2-billion city improvement plan. The plan would require a half-cent sales tax increase.

Jacksonville balked at the cost of the study -- $160,000 -- and has so far refused to make a deal.

But TaxWatch succeeded last year in getting a $75,000 no-bid contract from Leon County and the city of Tallahassee to study a 1-cent local sales tax that will expire without voter approval. TaxWatch's conclusion that continuing the tax will generate tremendous economic benefits made the headlines in Tuesday's Tallahassee Democrat.

TaxWatch also has done a $150,000 review of Hillsborough County finances -- a controversial project that did not involve competitive bidding and was ultimately paid for out of private donations.

TaxWatch describes itself as a 20-year-old public interest group "dedicated to improving citizen understanding and government accountability." It is best known for its watchdog role over state spending and its president, Dominic M. Calabro, who holds annual news conferences to expose millions of dollars of state budget "turkeys." Those are projects that don't get proper review and serve only special interests. Florida's governors rely on the turkey list in deciding which budget items to veto.

Calabro was out of the country Tuesday and could not be reached for comment.

Keith Baker, who serves as senior vice president and chief operating officer at TaxWatch, said the organization has to charge for some of its research projects because its annual budget of about $1.5-million doesn't cover all expenses. The organization largely relies on contributions from corporations, small businesses, homeowners, philanthropic foundations and other sources.

"We are a very small staff. We have a very small budget when you look at the size of our statewide effort," Baker said.

But TaxWatch's recent proposal to do a $160,000 study for Jacksonville caught Mayor John Delaney and his chief of staff, Susan Wiles, off guard. "TaxWatch bills itself as being funded privately. We didn't realize that there would be a big price tag associated with it," Wiles said.

Delaney is pushing a $2.2-billion "Better Jacksonville" plan that includes new public buildings, road work and other city improvements. Voters will consider a half-cent sales tax increase for the plan in September.

On May 25, Calabro wrote the mayor, offering TaxWatch's services in evaluating the Better Jacksonville plan. "Our research would help provide the voters and taxpaying citizens of Jacksonville a better understanding of the likely economic benefits of the proposed infrastructure improvements," Calabro wrote.

Delaney is a good friend to TaxWatch chairman T. O'Neal Douglas, a prominent Jacksonville businessman, and Jacksonville officials understand TaxWatch's clout in the capital. On May 26, TaxWatch released its annual list of turkeys, including a $25-million preservation project in Duval County that was important to Jacksonville officials. Gov. Jeb Bush later vetoed the project, and other budget items, on May 30.

Delaney and Wiles met with Calabro and Keith Baker on June 21 to discuss the TaxWatch study. "The tone of the meeting was very good, but the price tag was very high," Wiles said. Delaney wouldn't agree to the project that day, Wiles said, and TaxWatch later called back to offer a 15 percent reduction in price. The city hasn't made a final decision, Wiles said, and is looking to see whether city staff can handle such a study rather than hiring TaxWatch.

Tallahassee and Leon County also got a discount after being solicited for business by TaxWatch. The group last year proposed a $100,000 study of the 1-cent local sales tax issue, said Vincent Long, assistant to the Leon County administrator. County Commissioners didn't want to spend that, but ultimately agreed to pay $75,000, splitting the cost with the city of Tallahassee.

City officials also considered $100,000 steep. "We just felt that was basically a lot of money to pay them to do what they proposed to do," said Dinah Hart, administrative services manager for Tallahassee.

Former Hillsborough County Commissioner Joe Chillura said Tuesday that he asked TaxWatch to review county finances in 1997 -- TaxWatch didn't solicit the business. The idea was controversial, with some commissioners objecting to the lack of competitive bidding and the fact that a private businessman and good friend to Chillura had agreed to pay the bill.

Chillura said TaxWatch found ways for Hillsborough to save millions of dollars as a result of the study. "It was a totally positive experience for us," Chillura said.

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