Manatee County Administrator Ed Hunzeker's 2013-2014 budget blueprint dramatically restructures government revenue sources in ways that require the approval of voters first and then county commissioners.
The June 18 half-cent sales tax referendum will determine whether his proposed $517.8 million budget remains viable. Should voters agree on this new method to pay for health care programs, then commissioners will decide on the steep property tax reductions that Hunzeker proposes.
The third new revenue source are franchise fees levied on utilities that serve residents in the unincorporated portions of the county, projected to generate $15.8 million in the next fiscal year. Most of Manatee's municipalities charge this fee.
The Health Care Sales Surtax would raise some $23 million annually and pay for not only medically needy care but also programs required by state statute, including $5.7 million for jail medical costs and almost $4.7 million in Medicaid expenses.
The county projects visitors would pay a third of the sales tax increase, which only matches surrounding counties levy.
Other Florida counties have adopted higher sales taxes to support health care, with Hillsborough's at a full penny.
Manatee County currently supports health care costs with property tax revenue in the amount of about $14.5 million. The half-penny sales tax increase would replace that money and allow for property tax cuts.
In his message to commissioners on Thursday, Hunzeker stated: "There has been much discussion about whether property taxes would actually be reduced if the Health Care Sales Surtax referendum is successful. This recommendation follows through and delivers on the promise to produce a viable budget with significantly lower property tax rates."
Indeed, the county administrator proposed slashing the millage rate for property owners in municipalities by 25 percent and 13 percent in the unincorporated parts of the county.
The difference is because funding for the sheriff's road patrol unit would no longer be charged to all county residents, only to those property owners in the unincorporated county who receive those patrol services.
The projected 2015 depletion of the county's fund for indigent care is the reason behind the sales tax proposal. As interest rates plunged during the recession, the fund quit generating much revenue and the county began spending principal instead of interest. As more working poor and indigents sought emergency room health care, costs rose significantly, too.
Hunzeker's plan is to reduce those costs by steering uninsured patients to clinics instead of the most expensive hospital emergency rooms.
At this point in time, with Florida rejecting federal Medicaid money to cover uninsured residents under the Affordable Care Act, Manatee County cannot afford to count on Obamacare to cover these costs.
Should the referendum fail, millage rates will likely remain the same as this year. The following year, commissioners could face the unpleasant task of raising the millage once the indigent fund is depleted.
Commissioners could hardly vote down Hunzeker's property tax cuts, especially after agreeing to the referendum in the first place. Residents would rightly be up in arms should that unlikely scenario occur.
To clarify one point, the state levies a 6 percent sales tax. In Manatee County, the school district collects a half percent, which accounts for the current 6.5 percent sales tax here. County government does not earn any sales tax revenue. The school district's half cent cannot by law be shifted over to the county.
Over the past seven years, the county has chopped property taxes by $82 million and Hunzeker's 2013-2014 plan cuts another $19 million -- should the referendum pass.
One advantage of another property tax reduction is the county would be in a stronger position to spur economic development.
Hunzeker's budget recommendation includes two important priorities -- 4 percent more in compensation for county employees and capital investments that will create jobs and take advantage of lower interest rates and construction costs.
He also proposes a 10 percent reduction in building permit and inspection fees -- even as the workload increases. That is a testament to great efficiencies in government.
This budget recommendation offers fundamental changes for the future. The status quo is not sustainable. The county must support the health care community for our overall quality of life and our economy.
We recommend voters and commissioners support this plan.