Title: Letter With Enclosure
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Title: Letter With Enclosure
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Language: English
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Spatial Coverage: North America -- United States of America -- Florida
 Notes
Abstract: Letter With Enclosure, Jan 5, 1976, From: Charles Lee To: Daniel O'Connell
General Note: Box 10, Folder 1 ( SF Taxation, ad valorem tax referendum-SWFWMD-1975 - 1975 ), Item 36
Funding: Digitized by the Legal Technology Institute in the Levin College of Law at the University of Florida.
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Bibliographic ID: WL00001988
Volume ID: VID00001
Source Institution: Levin College of Law, University of Florida
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DANIEL W. O'CONNELL
ADMINISTRATIVE AND GOVERNMENTAL LAW
ENVIRONMENTAL LAW


SINCE NINETEEN-HUNDRED


SUITE 714
BARNETT BANK BUILDING
TALLAHASSEE. FLORIDA 32301


January 5 1976
;' January 5, 1976


Mr. Daniel W. O'Connell JAN: 19:76 -.
P. 0. Box 20429- -
Tallahassee, FL 32304
y C .-. ...B
Dear Dan: '

We would greatly appreciate your comments on the enclosed memorandum
from Frank Caldwell which concerns the upcoming referendum on the
Presidential Preference Primary ballot (March 9th) regarding a con-
stitutional amendment to allow ad valorem taxation for water manage-
ment districts. Frank Caldwell, you may recall, was formerly Legislative
Assistant to State Representative Jack Shreve, and in that capacity
was responsible for the drafting of the Water Resources Act of 1972.

Particular points of concern are:

1. Does the seemingly arbitrary difference in taxation rates (0.05
mills west of the line between Ranges 2 and 3 East, and 1.00 mill
East of the line between Ranges 2 and 3 East' create an inequity
likely to cause judicial invalidation of the constitutional
amendment? arid;
2. Does the wording of fthe ballot as prescribed by the Legislature
present the referendum to the electorate in a legally valid manner,
considering the fact that the ballot will not disclose differential
village caps for separate regions of the state? ...

It should be noted that the line between Ranges 2 and 3 East bisects
the Northwest Florida Water Management District, creating a situation in
which neighboring property owners could be taxed at different millage
rates while receiving identical levels of government service.

We are currently attempting to determine what posture Florida Audubon
should take on the upcoming referendum. Your advice.on the matters


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Page 2

January 5 1976.



discussed above and your thoughts on the issue in general would be

'greatly appreciated, :


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Enclosure : .- :
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',i .frankR Calwell -
/ 1516 Willow Wick Drive
*~. r1 Tallahassec, Florida 32303 '.

October 27, 1975-


The 1975 Florida Legislature adopted Coxnittee 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 r.er.bership of each house, House Bill 2325 places the

proposed amend- .nt on the Presidential Preference Primary ballot

in March, 1976.

The proposed amend.eent seeks to address a dilemma created by.

the Florida Water Resoutces Act of 1-972. The dilemma resulted

Sfro : a desire by the Legislature to create regional water man~age-

rient 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 dile-..a:
Article VII, 1(a), prohibits ad valorem taxation
for state purposes.

Article VI'l, g 9(b), provides that special districts
(ruch as water c:"...nagce-.cnt districts) may only levy an ad
valorc:;. tax upon rcfcrr'en:iu approval of the frccholders

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S" ".. 'residing in the district. '
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Article XII, 2 a nd 15, "grandfathcrod" all villages
authorized on the effective date of the revision to be
continued "until reduced by law. 0

The authorized millages levied in the two pre-1968 water

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

The Legislature did not choose to jeopardize that source of

revenue; yet it sought to create districts of similar power in

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

is expressed in 373.503(1), Florida Statutes:

373.503 Manner of taxation.-- .
,* (1) lt-isthi' finding of-the legislature-tha t.-
the general regulatory and administrative func- '
iions 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; .
I__ legislature that water resources programs of par-
ticular benefit to limited segments of the popu- .
)ation should be financed by those most directly
benefited. To those ends, this chapter provides
ror the establishment of permit application fees .
and a method of ad valorem taxation tofinanrcv
-the-works of-thedlistrict.'- -'""""

The Legislature sought to preserve the taxing capabilities

of the two existing districts, while also providing another source

of funding for the newly established districts. The concept has

been analogized to the Minimum Foundation Programs for state

funding of local education and law enforcement efforts. -;

The Legislature sought to assure that a minimal level of.
'. ,-.,*

water resource research and planning would be provided to every

area of the state, with the capability for local residents to

increase that level of funding if the need could be properly

established. This localized flexibility was further enhanced by

the original concept that fees to cover the costs of administration
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Sof the various permit systems would be set by each board at levels

commensurate with local costs. .

While the Legislature recognized the need for data collection,

research, planning, and similar activities which are-of benefit to

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 jeopardize

the taxing authority of the existing entities while creating the

new districts.-It therefore devised the policy set forth in 373.

503(1), Florida Statutes, to justify the expenditure of general

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

funded by local ad valorem revenues.

The impression should not be left that a state interest in

water management is a new phenomenon. In 1907, the Governor and

most members of the Cabinet were designated as the Governing Board

of the Everglades Drainage District. In 1929, the same officers

were designated the head of the Okeechobee Flood Control District.

The territories and assets of these-districts were ultimately

transferred to the Central and Southern Florida Flood Control

District, created in 1949.

In the first 20 years of its operations (1950-1970), the

Flood Control District received $62,803,461 in State General

Revenue Funds. These monies were matched with Federal Appropriations

of $176,422,000, and revenues generated by Ad Valorem taxation

amounting to $75,797,563. The history of the Southwest Florida
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SWa.ter Management Distict reflects a similar pat-~rn of the

substantial com,.itment 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 th construction 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

S -4- .

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data collection, research, and policy planning, e., development of

Sthe 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 overdrainage.

Obviously, there are wide areas of.overlap between these

Categories. For example, at some point in the "planning" process the

emphasis shifts from general policy to blueprints for a specific

project. There should not be an attempt to precisely defined either

of these categories. Maximum flexibility should be encouraged to

assure that essential functions can be funded by either state or

local revenues. In some instances, state funding may be a desirable

supplement to a-district program. In other instances, a district

board may wish to supplement a state-sponsored program with additional

local dollars, as the two older districts have often done.

Under the present constitutional provisions, that flexibility may

be obtained by convincing a majority of the electors in. a district

.(or a basin within the district) of the need for local funding.

Unfortunately, the old adage that "You don't miss the water 'til the

well runs dry," is an accurate characterization of public attitudes

regarding water management.

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Sthe o0% of Florida' s resent population which rides in the territor

/ 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

Slanguage 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 bretheren 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


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/"shallow draughts" cymolized by a q uart-milio dollar budget.

7- A water management prtam for a district of th a eographic size

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

hoax and a mere nuisance to the taxpayer.

Assuming, arcuendo, 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 m-eanders 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

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

not be authorized to levy their village 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

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r/.to adopt the ppmosBd-~semsw~e Wm me s-- eeSa reprsttatives

Sof 'the water managemer JNistricts, affected stat fgncies, 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.

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*i-. -
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___ __ ."_I-- --________ __ I*I*q' n n"T -!. p ,i a s
today: The vital fir-t 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 alternative use. This cost

analysis will require input from both physical scientists and resource

economists.

- The statutory and/or constitutional framework necessary to

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

special act provisions outlining" the details of the assessment, collection,

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

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

used. These provisions are so co.plex:;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 bet'.:een. the printing of the 1963 and'1965

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

The cor.-.ittee should offer .draft legislation to implement its recom-

mendations in ti-ne for orderly consideration by both houses of the

Legislature at/the 1976 and 1977 sessions.


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