JACKSONVILLE, Fla. - Florida is suffering from an increasing number of tax reform measures that undermine local governments, Jacksonville Mayor John Peyton said here yesterday.

Peyton, speaking during the opening session at the Florida Government Finance Officers Association annual conference this week, said that he is deeply concerned about state politicians "cheapening our way to greatness" with promises to ease taxpayer burdens.

"Florida is going down a fiscally dangerous road," Peyton warned.

Nearly 900 attendees are at this year's conference, many to learn how to deal with the numerous tax reform measures passed by lawmakers and voters over the past two years in the state with more expected to come on November's election ballot, including a possible Proposition 13-like proposal instituting a cap on yearly tax increases.

Last year, lawmakers mandated rollbacks on millage rates, then placed a referendum on February's primary ballot. Voters approved that referendum, which amended the state constitution and increased homestead exemptions. It also capped annual increases on assessments of commercial properties and second homes.

In the Sunshine State, only local governments and some special districts have the power to collect property taxes, which were effectively lowered by those tax reform measures.

Local governments should also prepare for continuing efforts to institute additional reforms through citizen initiatives as well as promises made by lawmakers in future legislative sessions, Jacksonville budget officer Kent Olson said during an afternoon panel discussion on existing and anticipated tax reform measures.

The long-term implications, Olson said, are that property taxes and other revenue streams will continue to be under scrutiny and face further controls by the state. He said that local government control over expenses will become even more important, and greater emphasis on user fees and charges by local governments may be offset by revenue caps.

"If we see revenue caps the only avenue will be to reduce spending," said Olson.

In addition, enacted tax reform measures must be disclosed during bond sales, bond attorney JoLinda Herring with Bryant Miller Olive PA, advised during a session on bond issuance.

"You've got to tell investors what's going on in Florida," Herring said. "I don't believe there's been a decreased demand for Florida paper because of tax reform."

In a session earlier yesterday, Kenneth Rust, president-elect of the national Government Finance Officers Association and chief administrative officer of Portland, Ore., said his state has active citizen initiatives that helped institute tax reforms with negative implications for local governments.

"I see Florida has some of the same prospects," said Rust, who will be inducted as president during the GFOA conference next month in Fort Lauderdale. "This is a time when sound financial decisions are most needed."

Rust also said one of the key priorities during his presidency of GFOA would be fighting a position adopted by the Securities and Exchange Commission that the Tower Amendment, which exempts governments from SEC regulation, be repealed because the SEC believes the muni bond market is broken and needs additional regulation.

Existing rules are sufficient and should be enforced, Rust said.

Coming up today, Florida GFOA conference sessions will focus on how to survive tax reform initiatives such as instituting sustainable retirement plans, using public-private partnerships to finance needed projects, new options to fund health care benefits, and alternative sources of revenue to help balance the budget without cutting essential services.


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