Q&A – Palm Beach County’s Special Taxing District Proposal for PBSO
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Today’s entry: Hi Brian. In a future Q&A, can you talk about the proposed special taxing district or municipal service taxing unit specific to the Palm Beach County Sheriff's Office? It seems like a good thing for municipalities, so they're not paying twice for sheriff's office, and it forces the sheriff's office to actually break out or line item their budget.
Bottom Line: It’s a great question that’s not gained as much attention as it probably deserves due to the debate over Amendment 3 and the potential for the elimination of non-school homesteaded property taxes in November. There’s also a bit of a misunderstanding about potential double taxation for municipalities which have their own police departments...so let’s dive in.
Palm Beach County is considering creating what is known as a Municipal Service Taxing Unit to fund the majority of the Palm Beach County Sheriff's Office budget which now paces over $1.2 billion. The crux of the proposal would be a plan to separate the Sheriff's budget from the county's general fund and make the cost of the Sheriff's Office more directly attributable to the taxpayers receiving the service. The Palm Beach County Commission recently voted to create a framework for the MSTU which is the first formal step in the process. The key date is September 15th when the commission decides whether to move forward with the proposal.
In breaking down the potential impact of this change if it takes effect...There may be a potential benefit for municipal residents – especially with those with their own police departments under the proposal. To the extent that the idea of double taxation currently exists, it’s in these situations. County taxes are paid by all municipal residents that support PBSO. Municipal police departments are supported by PBSO – though not nearly to the level of unincorporated communities which rely entirely on PBSO for law enforcement. Municipalities which contract with PBSO fall somewhere in between. The net-net of it looks like this...
Under the proposal an estimated $2 per $1000 in property valuation annually would be saved by those in municipalities...however for those in unincorporated communities – taxes would likely rise by $6 per $1000 in property valuation. In other words, over where we stand now approximately 55% of residents would benefit from the plan while 45% would end up paying more for the plan.
A city that has its own police department pays for that department, while its residents also pay county taxes that help fund the Sheriff's Office. But the Sheriff's Office also provides countywide services and law enforcement in many municipalities with their own police through contracts or other arrangements. So, there can be overlapping costs, depending on the municipality and the specific services involved – but it’s not inherently the case.
Supporters view this plan as a matter of fairness as effectively municipal residents have subsidized unincorporated law enforcement to a certain extent. In trying to determine the extent to which it occurs...my best current estimates show that the most impacted municipal residents likely pay about 40% more than the least impacted residents in unincorporated communities towards. Therefore, it’s not exactly double taxation as has been suggested – however you can certainly argue that it’s excessive taxation relative to services provided.
Another interesting element of the proposal is that it could also create greater accountability by forcing a clearer connection between the Sheriff's spending and the taxes used to fund it. That matters because the Sheriff's budget has grown substantially, and the current system makes the County Commission responsible for funding the Sheriff's requested budget from the county's broader general fund.
There are two sides to stories and one side to facts. On balance, the proposal likely is sensible, although with unincorporated residents likely paying a meaningfully higher tax rate for PBSO – this isn’t an issue that’s going to be popular for about 45% of the community.