TAB Plan, Projects, and Timeline

July 28, 2010

TAB was formed to find ways to reduce county spending. Notice that we are not trying to “reduce the millage rate”, or even “reduce taxes”. The complexity of county revenue sources and the various adjustments to property tax bills such as the homestead exemption and appraisal caps make tax comparison a game of “who wins, who loses”. Millage, likewise, is more a game of trends and estimates in property appraisal. To really get a handle on the affordability of the county spending it must be compared to an objective measure of economic activity, population, inflation, or some other external yardstick. That sort of measure could then be used to see how we stack up against other Florida counties, or government entities around the country.

Palm Beach is a “rich” county. Our per capita income is high for the state and for the country. This should imply that we could spend more per capita, and have a richer infrastructure and nicer amenities, parks, and facilities than the average, but it does not mean that county spending per capita can continue to increase without negative economic consequences to both consumers and businesses.

From a high level, the county budget has parts that are contracting in line with revenue and others that appear have grown without restraint – PBSO and Fire/Rescue for example. Both are complicated by absorption of municipal areas over the survey period, and capital projects for needed service enablement. Most of the growth though, appears to be in the area of employee compensation, driven by union contracts. This is a problem shared by governments at all levels and in all parts of the country. At its core, it is a failure of leadership by elected officials and it is not fair to blame the unions or the employees for requesting and winning a compensation package that is ultimately unaffordable. Just as failures of leadership from the executives of the Detroit auto companies led to federal bailouts, bad negotiating by county (and state and local) officials are leading us towards unpleasant consequences. Public employees deserve good pay and benefits, but it must be in line with the private sector where the wealth is created and which ultimately pays the bills. This is an area for long term focus by TAB.

A look at the chart prepared by Property Appraiser Gary Nikolits indicates that PBSO is the largest component of the county budget and has been growing much faster than the parts controlled by Administrator Weisman (which is shrinking, although modestly so). About $15M in cuts have been proposed by the Sheriff, mainly by cutting 3 entire programs. These are the Eagle Academy, the Drug Farm, and the Parks Police. We will look at these in another article and consider how they fit in the scheme of things. Beyond that it is difficult to analyse the PBSO budget as it is not published with the rest of the county. TAB has submitted a records request with PBSO for the “budget package” and have been assigned a tracking number, but as of yesterday, the Records Division could not say when it would be available.

Short term, TAB wants to see the millage unchanged at 4.344 versus the proposed 4.75 maximum. This would require another $52M in cuts (which is about 8.4% of ad valorem revenue, or about 1.3% of the overall county budget of $4B). Fire/Rescue, which has its own millage rate, is proposing no change for 2011, but it does plan to spend down reserves, so we will be looking at their spending as well.

TAB Timeline

With the next County Commission meeting on the budget set for September 14, we have established a schedule that will produce some solid proposals against our short term goals by that time. The timeline includes a September 2 public meeting, tentatively to be held in the Lantana branch of the County Library system when we will roll out the proposal. Commissioners, staff, and Constitutional Officers will be invited to this meeting. To meet this objective we have divided the TAB team up into work groups to delve into the following areas:

In the coming days, we will be organizing this website to display interim findings in these areas. We welcome comments and assistance. If you would like to work with us on these projects, or would like to propose additional areas of focus, please contact us at info@pbctab.org