BRADENTON, Fla. - Two FloridaSupreme Court justices yesterday indicated concern about overturning the state's nearly 30-year-old case law that allows community redevelopment agencies to issue tax increment financing bonds.
The concerns were raised during oral arguments involving two CRAs in Bay County, as well as a third pending case called Strand v. Escambia County. All three cases involve government entities that want to issue TIF bonds, but each has encountered legal challenges.
A central issue in each case has focused on TIF bonds and whether they should be approved by voters because Florida's constitution requires a referendum and voter approval for the sale of general obligation bonds secured by ad valorem taxes and the full faith and credit of the issuer.
However, since a 1980 case called State v. Miami Beach Redevelopment Agency, TIF bonds in Florida essentially have been considered revenue bonds that do not require a referendum because CRAs do not have taxing authority and bondholders cannot compel CRAs to levy taxes.
For nearly 30 years, the constitutionality of TIF bonds has not been questioned, said Justice Barbara Pariente, who indicated she was concerned about communities that relied on the 1980 case to plan their redevelopment efforts over the years.
"Not one group ever said that Miami Beach was wrong" until now, Pariente said. "How do we just go and say those people back in 1980 were wrong?"
Calling the 1980 case "settled law," Justice Charles Wellssaid, "State taxation and finance are matters that need some stability."
"Tax increment financing is widely recognized throughout the country," Wells said. "At the time Miami Beach was decided there was great discussion about ... whether these tax increment bonds were debt. We do have to acknowledge that there is some legal reasoning out there, in fact, a great deal of legal reasoning."
Some questions indicated justices were wrestling with distinguishing the Strand case from the two CRA cases heard yesterday. The two CRAs were created under Florida law that authorizes the use of TIF bonds through a prescribed process. In the Strand case, however, Escambia County did not create a CRA and was attempting to issue TIF bonds under its home rule power.
The Supreme Court heard oral arguments in the Strand case on Oct. 9 and has yet to issue a final opinion.
There is no set time frame for the court to rule in the TIF cases, but justices' opinions are released on Thursdays. q
