During the Tallahassee City Commission retreat on Wednesday, elected officials will get an update on proposed state legislation during the 2024 session that could have an impact on the city of Tallahassee.
Specifically, the update is focused on legislation that will impact city revenues.
The agenda item notes that “we are already seeing a trend emerging for the 2024 legislative session of attacks on local government’s ability to generate revenue to fund critical services. To date, multiple bills have been filed that would cap general fund transfers from utilities, eliminate allowable surcharges for water and wastewater customers located outside the municipal boundaries, and reduce local government ad valorem revenue.”
The legislation referenced in the agenda proposes a two-thirds vote on millage rate increases and an increase in the homestead exemptions from $50,000 to $75,000. Both bills would impact city revenues.
In addition, other bills address utility charges. HB 777 would eliminate the surcharge allowable by law for water and wastewater customers located outside of municipal boundaries and another bill would establish a limit on general fund transfers from utility revenues.
Both of these utility related bills – if enacted – would have a significant on Tallahassee’s general fund revenue.
Details related to proposed legislation addressed at the retreat are provided below.
HB1195 / SB 1322 – Millage Rates
These bills require that any increase in the millage rate be approved by a two-thirds vote of residents.
WMC 24-01, WMC 24-02, and WMC 24-03 – Exemption of Homesteads
The House Ways and Means Committee is proposing a constitutional amendment and implementation bill that would increase the homestead exemption from $50,000 to $75,000. This would need to be approved by the legislature and then by voters on the November 2024 ballot. The Committee is also considering WMC24-02, which would apply an annual increase in exemption values by the Consumer Price Index. Each of these would significantly reduce homestead property tax assessments and ad valorem revenue collected, thereby reducing the level of service the City can provide residents at the current millage rate.
HB 777 / SB 1088 – Water and Wastewater Municipal Surcharges
HB 777 would eliminate the surcharge allowable by law for water and wastewater customers located outside of municipal boundaries. It is likely that no matter the end product, a rural exemption will be sought and generally accepted for all perspective changes. Whether that exemption criteria will be based on population or budget dollar amount is uncertain.
The City assesses a surcharge on water and wastewater customers outside its municipal boundaries through an interlocal agreement with Leon County that was first approved by the City and County Commissions in 2005. This interlocal agreement was put into place to cover the cost of County residents using and participating in the City’s Parks and Recreation amenities and programs.
The City is advocating for an exemption for municipalities whose surcharge is executed through an interlocal agreement with the neighboring municipality/county.
HB 1277 / SB 1510 – Municipal Utilities
These bills would establish a limit on general fund transfers from utility revenues. The limit would be a rate equal to the amount derived by applying the average of the midpoints of the rates of return on equity approved by the Public Service Commission for each investor-owned utility in the state. The cap would be further reduced proportionately for utilities that have more than 15% of their retail customers outside their municipal boundaries. The bills also provide an exemption for municipal utilities that are governed by a utility authority board that, through the election of voting members from outside the municipal boundaries, provides for representation of retail customers located outside the municipal boundaries approximately proportionate to the percentage of such customers. Similar legislation died in committee last session, but this year’s version appears to have more momentum.
HB 275 / SB 340 – Protecting Critical Infrastructure
These bills aim to deter attacks on and increase penalties for damages to critical utility infrastructure, in part due to the uptick in assaults on electric utility infrastructure. “Critical infrastructure” will include electric, mining, natural gas, oil and gas, communications, water, water, ports, and railroad facilities. The legislation imposes felony criminal and civil liability penalties for causing intentional harm or damages to critical infrastructure, effective July 2024.
The 2024 Florida Legislative session convened on January 9, 2024, and will run through March 8. As additional developments occur, staff will update the City Commission.
Tallahassee City Commission Retreat: State Legislation Takes Aim at Municipal Revenues added by Staff on
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HB 1277 / SB 1510 – Municipal Utilities: Oh no, the shell game is threatened. Counties and municipalities have been raiding their Utility funds for decades. They do this in order to avoid the local office holders having to vote to raise property taxes to cover their unsustainable drunken sailor spending.
HB1195 / SB 1322 – Millage Rates: This is a good move. However, I would submit that referendums on increasing property taxes should be voted on ONLY by people who own property. Additionally, anyone receiving taxpayer funded entitlements should be prohibited from voting on tax increases of any kind.
The Commissioners will find ways to ADD more Fee’s, trust me.
The best way to make government more efficient is give it less money…