A series of unfortunate events - Citizens for a Better Nassau County

Citizens for a Better Nassau

Former Nassau County Commissioner

James L. Higginbotham

Retired Businessman

Robert W. Spaeth

October 29, 2015 4:23 p.m.

There has been a series of unfortunate events that have happened lately, which

strongly impact the long-term financial well-being our county. Yet, it is unsettling

to realize that many of the county’s residents are unaware of them. This series of

events began with a comprehensive financial audit that was presented by Burton &

Associates to the Nassau County Board of County Commissioners in July 2015.

To understand the importance of this audit, we need to review some events of the past and the financial vulnerabilities our county. The current financial state of

the county was principally caused by the economic downturn between 2008 and 2013, as we ended up with county property assessments – the value of all property in the county – decreasing by about $2 billion, which resulted in approximately $13 million less revenue from ad valorem taxes to fund government services.

This is compounded by the county’s heavy reliance on residential property taxes to

fund services because, while we have a lot of residential developments, we don’t have enough commercial, office and industrial development to balance the residential growth that we’ve experienced over the last several decades. Consider what consumes the majority of local government tax dollars: road building and maintenance, schools, and fire and rescue services, which are all primarily a function of residential growth. On average, a residential development consumes far more in government services than it returns in tax base, while other types of land uses are just the opposite, paying more into the tax base than they consume in services.

The "Save Our Homes" Amendment in the Florida constitution, which allows market forces to push down real estate values, but places an annual cap on increasing valuations at 3 percent or the Consumer Price Index – whichever is less (this year is 0.8 percent) – made the county’s financial problem worse. Since the economic downturn, the county has tried to get back on its feet financially, playing catch up until values and taxes reach their prior level.

This information is important, because we are still feeling the effects of it today, which is where the audit comes into play. The presentation of the audit at the county commission meeting showed that, if the county continues as is, they will continue deficit spending in the near term, severely reducing available reserves, limiting capital investments to fleet replacement only and allowing no further capital investments to go to capital maintenance. That means no road or other

infrastructure maintenance.

The presentation also highlighted that the county has a large, growing deferred maintenance issue on road repair and paving, rolling stock and other infrastructure. It pointed out that the county should be spending, at a minimum, approximately $7.5 million per year in ongoing maintenance. However, in order for the county to make these expenditures, they would have to either reduce other expenses and/or increase revenues in order to be financially sustainable. These expenditures are not only necessary, as we cannot imagine we will not need to pave a road or have road maintenance done, as well as other necessary capital maintenance, but they are a much-needed investment in the future and well-being of the community.

The unfortunate part of this is that this glaring information seems to have been

ignored by some of our community leaders who don’t seem to think there is a fiscal

crisis staring us in the face. This fiscal crisis is real and, if we do not do

something to address it, the effects will be far reaching, impacting every county

resident and property owner. Our property taxes will increase and, eventually, the

value of our properties will decrease, along with our quality of life. It will

severely hinder the county’s ability to attract the private capital investment and

high-wage jobs we need to pay for our growing pains and revitalize the economic

sustainability of our county.

Unfortunately, the words ‘economic development’ are only said in hushed tones in

the county, but how else can we financially sustain the county for the long run?

Private capital investment and high-wage jobs benefit the entire county. They

diversify our tax base, help keep residential property taxes low, help the county

make key investments in our infrastructure and schools, and help maintain the

quality of life we enjoy here in Nassau County.

Retired Nassau County Commissioner Jimmy L. Higginbotham and Retired Businessman Robert W. Spaeth are co-chairs of the newly-launched ‘Citizens for a Better Nassau County.’ For more information, please visit CitizensforaBetterNassau.com.