| The Daytona Beach News-Journal
Whether they remember it or not, elected officials in the Volusia and Flagler counties have a problem. And it’s one they’d better find out before setting their property tax rates for the coming year.
You could start by reading the Clayton Park cover story from Tuesday’s newspaper, which outlines the difficulties local hotels face in trying to hire enough staff for post-COVID tourism. Park describes a job fair at the Daytona Beach Hilton. In the past, job seekers would have lined up before the doors even opened. But in the first few hours of the event, Park wrote, only about a dozen potential applicants showed up.
The hotel managers are not alone. Across Florida, significant numbers of workers are reluctant to return to their former jobs, including working in restaurants, hotels, shops, nursing homes, and other economic sectors that rely on access to low-wage workers, and many of them. As a result, these employers – many of whom have vocally opposed a plan to gradually increase the Florida minimum wage to $ 15 an hour – must offer to hire the workers they need.
And this is where the wage issue meets the budgetary reality of local government. Many of their employees make far less than $ 15 an hour. Utilities accounting clerk. Park and leisure workers. Animal Control Officials. Maintenance personnel. Teacher’s helper. Public works technician. These are all open positions currently being advertised by local governments – with starting salaries as low as $ 10 an hour. And as Mike Scudiero points out in his essay, some police officers even start on a slightly higher salary
Cities and counties may not experience mass churn of current employees. But filling these and other positions that will arise will be much more difficult when the supermarket or restaurant around the corner offers more money.
Local officials need to figure out how to cope with the realities of today’s job market – and the future. They have options, one of which is to do nothing and hope that they can rummage through. You shouldn’t rely on that.
The next option is to cut jobs, to combine tasks or to get rid of them. Some functions can be outsourced or automated. These are options worth exploring, but many local governments have already gone through these types of belt buckles. Job cuts could mean shutting down services that residents rely on.
Cities and counties can also apply for grants. COVID-related funding is still flowing generously from Washington and could plug holes in local budgets for a year or two. However, some grants require local governments to expand their services or hire more staff. And the funding will likely have an expiration date. On the flip side, the Florida wage boom is unlikely to weaken.
Finally, there is the prospect of tax increases. It’s a concept that puts many local politicians at risk of hyperventilating. But one thing to keep in mind: what Florida law calls a “tax hike” doesn’t always match the numbers on a calculator, and this year it’s worse than it usually is.
Florida’s inelastic tax structure assumes that the government can go on with the same amount of money year after year. Thus, any property tax rate that generates more income than was received in the previous year counts as a tax increase (although the law fairly excludes new buildings from this calculation). In order to achieve their required “rollback rate”, many cities have to lower their actual tax rate by 5 percent or more.
The country’s economic roller coaster ride over the past two years has made that calculation pretty shaky. Land values are soaring, which is driving up tax numbers. But the local officials should cut this amount from their budgets and lower taxes accordingly.
This may not work this year – and the puzzle will likely go on until things settle down.
To be clear, we’re not saying the upward move in wages is a bad thing. In fact, the number of working Floridians who work 40 hours or more a week but still cannot afford the basic necessities of life is growing every year.
And we’re not saying that tax hikes are absolutely necessary this year – that’s a decision that local leaders have to make and, like I said, they have options.
But it’s something they should think better about or face tougher decisions in the years to come.