"Penny" Sales Tax Increase Will Cost You $12,000

The average West Boca family of four will pay an additional $12,000 over ten years if the proposed sales tax increase is approved. These estimates follow from the numbers stated by speakers at Tuesday’s West Boca Community Council meeting.
Four speakers addressed the audience (note we covered a similar event in February: Avossa and Berger Speak). First up was County Administrator Verdenia Baker. Substantial details of the plan are available on the One County One Penny website.
Like the three speakers after her, Baker was tone deaf to West Boca residents. In her talk she described how the money that would come to “your area” but a closer look showed she was including all of Boca, Delray and Boynton Beach in that area. She also referred to money going to the City of Boca Raton as in “our area” even though most of West Boca is west of the city lines.
Baker indicated that the total amount of revenue they expect to raise from this tax increase is $2.7 billion. In our analysis, with 1.3 million county residents that works out to over $2000 per resident. For a family of four it’s $8000. With average incomes in West Boca higher than for the county, it translates to roughly $12,000 over the ten years. A typical West Boca family of four will spend an extra $1000 on sales tax in the first year, with the number rising to $1500 or more in later years.
Fifty percent of the money from the tax will go to the school district, thirty percent to the county and twenty percent to the cities.
She described a lengthy list of projects that the money is supposed to go to. We have seen this list before and over half the money goes to projects in West Palm Beach. A very small share will benefit West Boca.
Baker briefly answered questions from us toward the end of the event:

The next speaker was Mike Burke, CFO for the school district. He also described various “needs” in the district. To his credit he started off with a funny joke about the jail and he spoke well. But as with the other speakers he was somewhat tone deaf, focusing on projects far from West Boca and apparently not recognizing the difference between the city and the rest of us.
Our post-event conversation with him is below. It became a little uncomfortable in certain moments but we give him credit for his demeanor and his answers.

As a follow up to this conversation we found the report he mentioned. Contrary to what he said the document does not say that projects will be prioritized by need. That may be the intent but it’s not in there.

Also the report’s descriptions do not match the apocalyptic tone set by Superintendent Avossa, Burke and others.

Finding #3: Of the 196 District schools and facilities assessed, the elementary schools are generally in fair condition (average FCI=15.2%), the middle schools are generally in good condition (average FCI = 13.1%), the high schools are generally in good condition (average FCI = 14.9%), and the ancillary facilities are generally in fair condition (average FCI = 23.1%). The overall District FCI average is 15.0%, which is in the “good” range, but borders on the “fair” range, which begins at 15.1%.

Finally with regard to the schools it should be noted that none of this money will go to hiring teachers or paying them more. It’s only for capital projects.
Next up was Sid Dinerstein, a long-time county Republican leader. After the two previous speakers took a full hour or more, Dinerstein was told he would only have 10 minutes. Dinerstein was also ignored when the event host announced various attendees and left him out.
Dinerstein was by far the most animated and interesting speaker of the four. We caught a brief clip of his speech but he had already left when we looked for him to answer questions at the end.

Dinerstein pointed out that the so-called “penny tax” is a 17 percent increase – from 6 percent to 7 percent. He dismissed the claimed needs asserted by the previous speakers and said the school district is “grossly overfunded”.
He suggested that the main needs of the county are really closer to $400 million rather than the $2.7 billion they are hoping to get from the sales tax increase. Dinerstein argued that it would make more sense to do a $400M bond issue with today’s low interest rates.
Dinerstein demonstrated the same disregard for the West Boca audience. Standing within arm’s reach of Ellen Winikoff he advocated for an extension of the Sawgrass Expressway from Broward into Palm Beach County, an idea that is widely hated here in West Boca. In describing the projects he viewed as necessary they all seemed to be in West Palm Beach, so his approach would do even less for West Boca residents.
The last speaker was Dave Kerner, a state representative who is now running for a county commission seat. He claimed (as did Baker) that 25% of the sales tax would be paid by tourists. If true that only adds to the burden imposed by the recently increased hotel tax to pay for a stadium in – where else – West Palm Beach. They seem unconcerned about or unaware of the risk of killing the goose that lays our golden eggs. If you raise taxes on tourism, tourists might come less often. He also repeated Mary Lou Berger’s February threat to raise property taxes if the sales tax increase is not passed.
Some other interesting details from the evening were:

  • The Lamborghini exemption – Baker said that the sales tax is capped at purchases under $5000, so if you buy a Lamborghini you won’t pay extra sales tax on most of that purchase.
  • Kerner and Baker both denied that sales tax is regressive. This is contrary to well established economic studies showing that sales taxes place a higher burden on the poor.
  • Taniel Shant, who is running against Mary Lou Berger, was in the audience. Shant opposes the sales tax increase.
  • In other news there has been some talk about developers buying the Boca Municipal Golf Course (north side of Glades west of the Turnpike) and building homes. Nothing has happened yet.
  • The proposal to build on the farm behind Home Depot is apparently making progress and may possibly resemble Delray Marketplace.
  • A new park or children’s playground has been built in Watergate Estates (aka West Sandalfoot) and will have a grand opening soon.
  • There has been an ongoing problem with trucks parking on swales on 66th Street (SW 66th we think) and PBSO is working to stop that.

Weinroth Opposes Sales Tax Increase

When we published our story about the proposed sales tax increase, we asked several elected officials and others for comment. So far this is the only response, from Deputy Mayor Robert Weinroth of the City of Boca Raton.

Deputy Mayor Robert Weinroth
Deputy Mayor Robert Weinroth

There’s a move afoot to address the need for additional cash by tweaking the sales tax. For reasons I will discuss, below, I cannot support the proposals, as they are being negotiated between various entities.
While truth be told, there are many ways the new money could be spent that is the crux of my concern about creating this new revenue stream. No matter how many times we are told the money will be spent in a well thought out fashion, my mind harkens back to the same arguments made when the Florida Lottery was first proposed.
The Lottery was “sold” to the voters as a way to ensure the education of our children. Who could possibly argue against enough funding for our children to receive the best education possible? Unfortunately, the new funds arrived, as promised, but the funds originally earmarked for education were quietly redistributed to other budget priorities.
Thus, education and the institutions built for its delivery have not seen the benefits of all this new Lottery money. Nobody bothered to ensure the prior levels of funding were maintained or, for that matter, increased, as would have been the case absent the Lottery funding. So now we’re coming back to the voters with another opportunity to ensure enough funds to educate our children.
So excuse me if I do not believe a similar redistribution of funds will not occur when the $2.7 billion (touted as the projected windfall from a one-cent increase in our sales tax) is embraced by the electorate.
I am also not at all confident we wouldn’t create a disincentive to people making their purchases within Palm Beach County. Why pay the extra levy when a short drive south (for south county residents) or north (for north county residents) will allow them to save the sales tax differential.
OK, maybe the trips to Publix, Walgreens and CVS will be unaffected, but big-ticket items (jewelry, art and automobiles being the biggest ticket items to immediately come to mind) would be impacted.
The same would hold true for rent paid on apartments and business space. All of these things add up and if small businesses and people begin to scoot across the border to Broward or St Lucie, the projected influx of revenue is going to be illusory.
I am also not at all comfortable with the idea of increasing what is already a regressive tax. The less one makes the higher the percentage of the sales tax bite in relation to earnings. The less you save, the more you spend and the more you spend, the more sales tax you pay.
Finally, even if the municipalities were really going to see 40% of the new money (again, as the proposal is being refined I see the municipality’s cut getting smaller and smaller) other sources of funding are likely to be reduced. There are already examples of this offsetting being discussed which, in the end, reduces what new money the municipalities would actually see.
The real answer is to stop ignoring the county spending needs and pass a realistic budget, which may necessitate an increase in the millage rate and be spread more equitably to the residents of our county.
Robert S. Weinroth | Deputy Mayor
City of Boca Raton