Governor Crist targets reserve funds

Governor Crist targets reserve funds

Governor Charlie Crist is honing his pitch to convince voters they can’t live without deep property tax cuts the Legislature has put to public vote in January.

The legislation passed Wednesday includes an immediate freeze on county and city tax revenues and requires cuts and caps going forward.   But to pass the proposed constitutional amendment offering the biggest cuts, Governor Crist and other proponents must convince 60 percent of voters to trade their currently guaranteed caps on assessed values for larger homestead exemptions and promises of restrained local spending.

Crist’s immediate approach is to cast government reserves — a financial cushion guarded jealously at the state level — as hometown fat.  A report generated by his budget office shows Florida counties in 2005 held $8.6 billion in unspent accounts. Cities had another $6.5 billion.

New development and swelling home values have allowed some communities to bank a sizeable amount of cash during the recent real estate boom.  From 2000 to 2005, Brevard County added $185.8 million to its savings. Charlotte County increased reserves $144 million.  Reserve accounts for the cities of Rockledge and Fort Myers grew by more than 10 times, among the fastest growing reserve accounts in Florida.  Far and away, Palm Beach County socked away the most. The state’s third-largest county has $1.3 billion in reserves, causing a Tallahassee spending watchdog, Florida TaxWatch, to accuse it of hording.

TaxWatch CEO Dominic Calabro says that large stashes of money “insulates the top brass from any fiscal discipline.”  Calabro considers reserves of 5 percent to 10 percent of a government’s annual budget adequate. At 20 percent, he said, “it becomes excessive.”

Not every Florida community is flush.  Crist’s records show 281 cities and taxing districts lost reserves in the five years from 2000 to 2005, and the amount Florida cities had in rainy day funds overall declined 6 percent.  Crist’s attack on local reserves also comes at a time when the state’s own savings accounts continue to grow.

Governor Jeb Bush began the reserve building, lauding rainy day funds as Florida’s ace in the hole when contending with hurricanes or negotiating better bond deals. In signing his first state budget this month, Crist added $2 billion to those reserves.

The entire report is attached herein.