Amendment 1 Implementation

On Jan. 29, 2008, 64 percent of Florida voters approved Amendment 1 and it was added to the Florida Constitution. Even though the amendment was rejected by the majority of local voters (only 36 percent approved), the passage of Amendment 1 will apply to Leon County's 2009 budget.  The Board of County Commissioners has already begun to address the potential impacts to the County's programs and services. Amendment 1 doubles the homestead exemption to $50,000 for non-school related property taxes, provides a $25,000 exemption for tangible personal property, limits the annual increases in taxable value for non-homestead property to 10%, and offers portability of the popular Save Our Homes tax savings. The tax reductions and exemptions provided by Amendment 1 will apply to your 2009 tax bill so the County must prepare its budget accordingly for the 2009 fiscal year beginning October 1, 2008. 

January 30, 2008 Workshop on Prioritization of County Services
The passage of Amendment 1 immediately created an anticipated $12.8 million reduction in Leon County's 2009 tax base, prompting the Board of County Commissioners to hold a workshop on Jan. 30 to prioritize County services and discuss strategies to balance the County's budget.

For detailed information on the workshop, please read the Jan. 30, 2008 Workshop on the Prioritization of County Services.

At the workshop, the Board began preparations for the FY 2009 budget process by ranking 32 different County services and placing them in to four different categories in order to meet the revenue reductions caused by Amendment 1. The four categories were as follows:

A: No Reduction in Funding
B: Constrained Reductions (approximately 8% reduction in funding)
C: Level of Service Reductions (approximately 19% reduction in funding)
D: Significant Service Reductions (approximately 50% reduction in funding)

Through this exercise, the Board was able to broadly identify nearly $12.8 million in ad valorem revenues to cut in 2009. Based on the Board's prioritization, staff will review the County's budget over the next few months and prepare detailed budget cuts for the Board's consideration during the FY 2009 budget workshops. Staff will identify potential reductions in excess of $12.8 million to give the Board flexibility in deciding which services to reduce.

View the rankings

March 11, 2008 Workshop on FY 2009 Budget
On March 11, 2008, the Board held a workshop on the development of the FY 2009 budget. For more detailed information on the workshop, please read the March 11, 2008 Budget Workshop. The Board held this early budget workshop as a preemptive measure to address the pending revenue shortfalls caused by Amendment 1. A summary of the Board's actions is outlined below:

I. Service Level Reductions
Staff provided the Board with an update on the service reductions resulting from the hiring freeze enacted in February 2007. At the time of the workshop, the County had 88 vacant positions, equal to 78 Full Time Equivalents as some of the positions were part-time. The table below provides a summary of the vacancies by department.

Summary of Vacancies

Due to the number of vacancies, staff provided the Board with an analysis of the current service level reductions department-by-department, and the Board directed staff to reduce branch library hours from 52 to 40 hours per week due to the 17% reduction in library staff.

The Board also reviewed staffing vacancies in other departments that have led to a reduction in the level of services provided to County residents, including:

• The response time for animal control officers

• The frequency of grading the County's dirt roads

• The amount of major and minor asphalt repairs and improvements

• The maintenance of roadside ditches

The hiring freeze has provided the County more flexibility in dealing with revenues losses but has impacted service delivery.  If the Board were to eliminate all of the vacant positions, it would result in a recurring savings of approximately $3.4 million. By acknowledging the current impact of the hiring freeze and approving service level reductions, the Board has ensured that staff will be able to provide quality services in the remaining program areas.

II. Voluntary Separation Program
The Board adopted the Voluntary Separation Incentive Program (VSIP) for Board and Constitutional Office employees to serve as a management tool to encourage employees to voluntarily leave employment through resignation or retirement to minimize possible involuntary reductions in the workforce. The primary objective of VSIP is to create additional vacant positions (FTEs) throughout the organization that can eventually be eliminated during periods of the budget constraints. Employees that are in positions considered to be critical to the core function of the County will not be eligible.

III. Cost Saving Measures for Employee Health Insurance
The Board adopted a cost saving strategy designed to save the County money on the cost of employee health insurance. The County currently contracts with two healthcare providers, Capital Health Plan (CHP) and United Healthcare (UHC), to cover Board and Constitutional Office employees. In order to mitigate the ongoing increases in healthcare costs, the Board adopted a strategy that would establish a maximum dollar contribution to employees' healthcare at the rate charged by the lowest cost provider. Employees would still have the opportunity to select a more expensive plan but will have to pay the difference between their provider and the cheapest provider. Had this strategy been in place in 2008, the estimated savings to the County would have been $392,275 based on the 2008 healthcare costs. This strategy will be applied to the 2009 healthcare rates as determined by the County's insurance providers.

IV. Solid Waste, Stormwater, Transportation, and Growth & Environmental Management Subsidies
During the January 30, 2008, Workshop on the Prioritization of County Services, the Board discussed County services that are funded through both user fees and property taxes. The discussion focused on the policy decision to use both revenue sources to fund each particular service. The Board acknowledged that it had not regularly increased fees over the years to keep up with the cost of the services. Instead, the Board chose to subsidize certain County programs with property tax revenue in order to keep fee rates at an artificially low level. The Board debated the rates of fees for certain County programs and questioned whether or not the fees should be set at a rate to cover the cost of services. At that time, the Board directed staff to compile information on Solid Waste, stormwater, transportation, and Growth and Environmental Management subsidies.

Staff presented the requested information at the March 11, 2008, Budget Workshop. The Board considered whether or not to make these programs Enterprise Funds by calculating fees based on the direct and indirect costs of the enterprise.  Below is a summary of the Board's actions:

• Solid Waste Fees: The Board directed staff to bring back additional options for consideration such as reducing services, raising the non-ad valorem assessment to only cover the cost of disposal, mandatory collection or combinations thereof.

• Stormwater Fees: The Board directed staff to develop budget reductions to reduce the general revenue subsidy to the Stormwater Management fund with no increase in the assessment. In addition, the Board authorized the Chairman to negotiate with Talquin Electric Cooperative to include non-ad valorem assessments in Talquin's billing.

• Growth & Environmental Management Fees: The Board directed staff to develop an FY 09 proposed budget that incorporates the implementation of new fees, and implemented a 20% increase to existing fees.

• 1-5 Cent Gas Tax: Gas tax revenues are required to be used for transportation-related expenses including the building and maintenance of County roadways. In recent years, the County has been subsidizing its transportation funding with property tax revenues.  In FY 07, the County transferred $1.9 million in general revenue from property taxes to the transportation fund.  Due to the 2007 statutory rollback imposed by the Florida Legislature, the Board reduced the 2008 subsidy approximately $900,000. At the March 11, 2008 Budget Workshop, the Board opposed an increase in the gas tax and directed staff to eliminate the general revenue subsidy to the Transportation Trust Fund.

The Board has scheduled a series of budget workshops from July 8 through July 11, 2008, in the Commission Chambers on the 5^th floor of the Leon County Courthouse. Please refer to the Commission Calendar for additional information on the scheduled budget workshops or any other County meetings that you may interested in attending.

More information:

February 27 Workshop on Ramifications and Recommended Actions Related to the On-Going Property Tax Reform Efforts

• Watch the Workshop Online in Real Player Format

Leon County Budget Information

December 11, 2007 Agenda Item on the Proposed Property Tax Amendment

Resolution in Opposition to Property Tax Amendment

For more information, please contact Ken Morris, Intergovernmental Affairs Coordinator, at 606-5300.