Title: Paper by Frank Caldwell addressing constitutional amendment issues
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Title: Paper by Frank Caldwell addressing constitutional amendment issues
Alternate Title: Paper by Frank Caldwell addressing the issues in the proposed constitutional amendment authorizing WMDs to levy ad valorem taxes, including the resolution passed by the NWFWMD to form a task force to study and offer recommendations to the Florida Legislat
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Language: English
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Spatial Coverage: North America -- United States of America -- Florida
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General Note: Box 3, Folder 3D ( LEGISLATION - BOX 3, FOLDER 3 ), Item 113
Funding: Digitized by the Legal Technology Institute in the Levin College of Law at the University of Florida.
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Bibliographic ID: UF00051494
Volume ID: VID00001
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Frank Caldwell
1516 Willow Wick Drive
Tallahassee, Florida 32303

October 27, 1975


The 1975 Florida Legislature adopted Committee Substitute

for Senate Joint Resolution 1061 (CS/SB 1061) proposing a

constitutional amendment which would authorize the governing

boards of water management districts to levy ad valorem taxes

upon the assessed value of real estate and tangible personal

property in the district. By virtue of passage by a three-fourths

vote of the membership of each house, House Bill 2325 places the

proposed amendment on the Presidential Preference'Primary ballot

in March, 1976.

The proposed amendment seeks to address a dilemma created by

the Florida Water Resources Act of 1972. The dilemma resulted

from a desire by the Legislature to create regional water manage-

ment districts with uniform authority in all areas of the state.

Two such districts, with many of the powers contemplated in the

1972 act, were already in existence. The Central and Southern

Florida Flood Control District had been established since 1949,

and the Southwest Florida Water Management District had been in

operation since 1961. Both of these agencies were created by

special legislative act, and both were authorized by their

enabling legislation to levy ad valorem taxes. The State

Constitution, as revised in 1968, contained three provisions

pertinent to the current dilemma:

Article VII, l(a), prohibits ad valorem taxation
for state purposes.

Article VII, 9(b), provides that special districts
(such as water management districts) may only levy an ad
valorem tax upon referendum approval of the freeholders

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residing in the district.

Article XI'I, 2 and 15.. "grand fathered"* all millages
authorized on the effective date of the revision to be
continued "'until reduced by law,"

The authorized millages levied in. the two pre-1968 water

management districts produced in excess of $20,000,000 in 1972

The Legislature did n ot choose to jeopardize that source of

revenue; yet it sought to create district's of s~imil~ar poower i

the balance of the state. The policy adopted by the Legislatur

is- expressed in 373.503(l), -Florida Statutes:.

373.503 Manner of taxation.-
(1) It is the finding of the legislature that
the general regulatory and administrative func-
tions of the districts herein authorized are of
general benefit to the people of the state and
should substantially be financed by general
appropriations. Further, it is the finding of the
legislature that water resources programs of par-
ticular benefit to limited segments of the popu-
lation should be financed by those mostdrcl
benefited. To those ends, this chapter provides
for the establishment of permit application fees
and a method of ad valorem taxation to finance
the works of the district.















of the various permit systems would be set by each board at level

commensuratee with local costs.

While the Legislature recognized the need for data collecting

research, planning, and similar activities which are of benefit t

all Floridians, and are not directly related to property values,

it did not feel that the residents of Northwest Florida, for

example, derived any particular benefit from a drainage canal

system constructed in Dade County.

The Legislature'recognized that the electorate- in a district

would not be inclined to vote to extend an ad valorem tax. unless

the need were thoroughly understood, and did not wish to jeopardiz

the taxing authority of the existing entities while creating the

new districts. It therefore devised the*policy set forth in 33

503(l)., Florida Statutes., to justify the expenditure of general

revenue 'for functions which had, in some cases, been previously

funded by local ad valorem revenues.














Water Management District reflects a similar pattern of the

substantial commitment of general revenue dollars to fund localized

construction.projects. The 1975 Appropriations Act provides

$2,343,000 in general revenue funds to the Flood Control District

and $1,828,400 to the Southwest Florida Water Management District

for fixed capital outlay. In addition, all five districts will

receive $400,000 each in general revenue funding for general

operations.

A cursory examination of this historical pattern could lead one

to conclude that the State only has a financial interest in water

management activities when there is a matching effort to generate

local funding. This, is not altogether a valid conclusion. One of

the lessons learned in South Florida has been that prospective water

management, in the form of planning and regulation, is far less

expensive than remedial water management, in the form of public

works facilities. Another distinguishing characteristic of the old

and the new districts is their distinctive topography. The flatlands

of South Florida make it particularly susceptible to both flood and

drought, while the relief of the upper portions of the state allows

for theconstruction of relatively small scale works to provide both

reservoirs and flood control structures.

Thus, the 1972 Legislature found that the financing of "general

regulatory and administrative functions," as well as the more traditional

supplemental funding of land acquisition and construction costs, were

proper expenditures of state funds. No attempt was made to precisely

define "general regulatory and administrative functions," and none

should be now made. Administrative functions would surely include















data collection, research, and policy planniing, i.e.,* developmento

the water use plan, as well as personnel, budgeting, and similar

functions. Regulatory functions would include promulgation of

regulations and the issuance and enforcement of permits issued

under such rules.

In general,, "Water resources- programs of particular benefit

to limited segments of the population" were envisioned as those

activities directly associated with physical water management

"projects,"' such as dams, canals, and other works designed- to

enhance the use of a water resource. Examples include navigable

streams, channelization or. other improvements to drainage works

designed to protect developments constructed in a natural flood

plain, or conversely, reservoirs constructed to correct overdraiae

Obviously, there are wide areas of overlap between these

categories. For example, at some point in the "planning" procesth

emphasis shifts from general policy to blueprints for a specific












One of the strategies of the proponents of CS/SJR 1061 is that

the 80% of.Florida's present population which resides in the territory

presently subject to ad valorem taxation will (a) recognize the

benefits derived from the works of the Flood Control and Water Manage-

ment Districts; or (b) recognize the inequities of double taxation

inherent in the present system. For either reason, the proponents

hope that the 80% will "grant" or "impose" the "benefits" or "burdens"

of ad valorem taxation on the 20% residing in the three post-1968

districts.

That strategy was dealt a serious blow by the insertion of

language limiting the taxing power in Northwest Florida to 0.05 mill.

This means that a "yes" vote in central and south and southwest Florida

will assure that those residents will continue to pay up to 1.00 mill,

while their brethren in northwest Florida will have a constitutional

guarantee that --even if a majority of northwest Floridians should ever

wish to impose a higher millage-- property there will never be subject

to more than a nuisance tax.

The characterization "nuisance tax" is deliberate. Based on

1974 property valuations in northwest Florida, a full 0.05 millage

assessment would generate approximately $250,000. The Northwest

Florida Water Management District received a general revenue grant of

$500,000 for fiscal year 1974-75, and $400,000 for fiscal year 1975-76.

This level of funding is barely adequate to begin accumulating and

assessing the data necessary to the orderly development of a district-

wide water use plan. Implementation of any of the regulatory and permit-

ting systems authorized by Chapter 373, Florida Statutes, will require

supplemental funding such as permit application fees. A little planning,

like a little learning, is a dangerous thing. If Northwest Florida is

not to "drink deep" at the Perian Spring, it should taste not the kind

-6-












"shallow draughts" symbolized by a quarter-million dollar budget.

A water management program for a district of that geographic size

and hydrologic complexity funded at such a meager level is a cruel

hoax and a mere.nuisance to the taxpayer.

Assuming, arguendo, that there is a rational basis for authorizing

a reduced millage cap for northwest Florida, it remains difficult to

rationalize the line chosen to serve as the boundary between the 0.05

and 1.00 mill assessment. The "line between ranges two and three east"

serves as the western boundary of Jefferson County from the Gulf of

Mexico to the Tallahassee Base Line. North of the Base Line, the

boundary meanders eastward, then follows the shoreline of Lake

Miccosukee. The present statutory eastern.boundary of the Northwest

Florida Water Management District meanders from approximately five to

approximately twelve miles east of the range two and three east line.

Unless the District boundary is revised to follow a political rather

than a hydrologic boundary, those property owners in northeastern

Leon and western Jefferson Counties-could be subject to a 1.00 mill

levy, while their neighbors are subject to only a 0.05 mill levy to

support the same water management services.

Although the proponents of CS/SJR 1061 urged that the question be

put to the voters in March, 1976, there is no provision specifying a

different effective date than that established by Article XI, 5(c),

of the State Constitution. Thus, if ratified in March, 1976, the

amendment would take effect on January 4, 1977. Since tax assessments

are based on the evaluation on January 1, the governing boards would

not be authorized to levy their millage until the 1978 tax year.

As the Legislature expressed in 1972, a property-based tax is

neither the only nor necessarily the most desirable method of

-7-














funding water management programs. There is no compelling urgency

to adopt the proposed amendment in March. Instead, representatives

of the water management districts, affected state agencies, and

water-use/conservation oriented interest groups should form a

statewide study committee to address the full range of policy

questions relating to the financing of water management programs.

Specific issues the committee should address include:

-- The appropriate role of a property tax as the basis for financing

water management programs: There is often a direct correlation

between the construction of a water management work, such as a dam

or canal, and a benefit to a particular parcel of real estate. In

those instances, the ad valorem tax is generally an equitable financing

tool. In other instances, such as the draining of "non-productive"

wetlands, that land with the lowest assessed valuation is the very

land most (economically) "benefited" by the drainage works financed

by taxes on other property not benefited by such drainage. Other

water management practices, such as planning and regulation of water

usage, benefit all affected persons without regard to property ownership.

Such functions should be financed either from a general revenue source

or through a system of "user" or "benefit" fees.

-- The appropriate role of "User" or "Benefit" Fees as a basis for

financing water management programs: The term "user fee" is emotionally

charged. Nonetheless, the time has come for major water users, as well

as the individual domestic users attached to a municipal water supply

system, to pay a reasonable fee for the water they use. The committee

should address the philosophical and practical problems of assessing

a reasonable price to the benefits derived through planning, regulation,

and permitting; and to equitably distributing that cost.

-8-



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- The true costs of Florida's water resource management programs

today: The vital first step in determining who should bear the costs

of water management programs is to determine the full cost of those

programs. These costs include both the relatively obvious fiscal

costs associated with the location, acquisition, treatment and disposal

of water, and the less obvious "costs" associated with the allocation

of the resource to one use versus an alternativ-e ue,. This cost

analysis will require input from both physical scientists .an resource

economists.

-- The statutory and/or constitutional framework necessary to

implement the recommended program: The two.pre-1968 districts rely on

special act provisions outlining the details of the assessment, collector

and use of their property tax revenues. The general statutory provisions

contained in Part V of Chapter 373, Florida Statutes, have never been

used. These provisions are so complex and confusing that apparently

no one has noticed -- or cared about -- a typographical error transposing

two lines of type in subsections (6) and (7) of 373.563. The

transposition occurred between the printing of the 1963 and 1965

editions of the Florida Statutes, and has remained uncorrected to date.

The committee should offer draft legislation to implement its recom-

mendations in time for orderly consideration by both houses of the

Legislature at the 1976 and 1977 sessions.









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WHEREAS, Chapter 373, Florida Statutes, known as the
Florida Water Resources Act of 1972, provides for the delegation
of authority to accomplish the conservation, protection, management
and control of the waters of the State to regional water manage-
ment districts created under said Act; and

WHEREAS, the Northwest Florida Water Management District
was created under the provisions of Chapter 373 and has been
delegated substantial authority under the Act; and

WHEREAS, Section 373 "053(1) sets forth legislative policy
that water management programs should be financed from three
sources, to wit: general appropriations, ad valorem taxation,
and permit application fees; and

WHEREAS, Senate Joint Resolution 1061 proposes to amend
Section 9, Article VII, State Constitution, to permit water
management districts to levy ad valorem taxes without the
necessity of local referendum approval; and

WHEREAS, said Senate Joint Resolution 1061 unreasonably
limits the tax base of most of the Northwest Florida Water
Management District to a maximum of one-twentieth of the tax
base allowed all other water management districts in the State;
and

WHEREAS, if approved in the special referendum election
of March 9, 1976, said amendment would become effective on
January 4, 1977, and would not authorize the collection of
revenue prior to the 1978 tax year; and

WHEREAS, the adoption of the proposed amendment would
encourage the disturbance of the fair and equitable allocation of
costs commensurate with benefits contemplated in section 373 ..0{53(1),
Florida Statutes, by placing a disproportionate burden upon the
property owner;

NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BOARD
OF THE NORTHWEST FLORIDA WATER MANAGEMENT DISTRICT:

'.fd:I ^.. hat___e _ead reco lrds that the constitutional
amendment proposed by Senoe by the citizens of F lrfa on Ia?.9, 1976; and

BE IT FURTHER RESOLVED:

2. That the Board authorize the formation of a task
force to conduct a study and to offer recommendations to the
Florida Legislature for timely consideration during the 1976
and 1977 Regular Sessions regarding appropriate and equitable
means of financing the water resource management programs of
the State; and

3. That said task force shall be composed of an executive
committee of three Board members appointed by the Chairman of
the Board, and such Board and staff members as the Chairman
shall appoint. In addition, participation shall be affirmatively
invited of legislators, federal, state and water management
district personnel, the academic community, water users and







^ ~~other interested persons or organization's; and *-- *''

4. That said task force is authorized to use,,: -the
personnel and facilities of the Northwest Florida Water
Management Di-strict subject to Board authorization of
expenditures, provide-1d, that no public funds shall be ex-
pended on behalf of or in opposi-tion Lo the M1arch 9,, 1976 -.
constitutional amendment referendum. Provided, further,
that public funds may be) expended on an objective public
information program to bring the issues involved in the
referendum to the attention of the voting public.




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