Late in the afternoon on the day preceding the 4 th of July weekend the draft Martin County budget for 2009 was released to the public.  Usually this is a tactic taken by politicians who want to get the least publicity possible for an item that they believe will be controversial.  However, at $363.7 million the total amount in the Administrator’s proposal is just above the $355.9 million of the 2004-05 budget and appears to be an appropriate amount under the circumstances.  As we pointed out last week, this is in line with the anticipated reduction in ad Valorem tax revenue based on property evaluations that currently appear to be at about 2004 levels.  The official revenue estimate is due from the Property Appraiser’s Office today, so we will know more about the actual revenue loss very quickly.

How the revenue is being generated is a part of this story that has not been adequately covered by the press.  First, there is a recommended 3% increase in the millage rate from the current $6.83 per $1,000 in taxable value to $7.04.  This is being “sold” as a minor increase and that the “average” property tax will be reduced by over $200.  However, many homeowners have been protected by the Save-Our-Homes “homestead” legislation to a 3% per year maximum increase in assessed value on their residence since 1992.  Because of this law, and the dramatic increase in home prices early in the decade, many homesteaded residences purchased before the real estate bubble are currently assessed below market value  for tax purposes.  Many homesteaders do not realize that even though their market value decreases, their assessed value will continue to rise 3% per year until it reaches market value.  Therefore, all of these homesteaded properties will have their taxable valueraised by 3%,then taxed at the 3% higher rate by the new recommended ad Valorem millage.  In short, their taxes will probably go up even though their actual market value has declined. 

The additional $25,000 homestead exemption approved by voters in January will help to offset the increase for some homesteaders, but many do not realize that it does not apply to school taxes The broader result of all this is that for the first time in many years the County’s resident voters will be hit by a tax increase while the long suffering snowbirds and businesses owners will get a break. And, all residents and businesses will be paying more for basic public services such as garbage collection, electricity, water and sewer service.  All in all, this is not a good election year scenario for incumbents - so stand by for changes.   

One change we are not happy about is the possible withdrawal of the 5% cost-of-living raise “give back” offered by the International Association of Firefighters. We hope that this is just a misunderstanding and the much appreciated and lauded initiative to help resolve the County’s budget crisis will be carried through without delay.

Even though we have not yet seen the actual personnel reductions implicit in the draft budget, we are equally concerned about the spending side of this equation. We understand from the data released that there are 118 jobs that have been cut with possibly 7 more in jeopardy. But, where and at what level are these cuts being made? Obviously senior management needs to be reduced in proportion to the reduced pay roll, span of control and responsibility. However, care must be taken to prevent creating other bureaucratic problems such as when jobs requiring a high degree of technical knowledge are assigned to senior administrators ill equipped to supervise them. This type of reassignment can also lead to inadvertently adding additional and unnecessary layers of supervision/coordination. The keys to successfully downsizing are to be fair, impersonal maintain essential services and adhere to the KISS (Keep It Simple Stupid) principal.

We are also disturbed that we have not heard of any significant changes to the personnel policies that were instrumental in causing the difficulties the County now faces. The major problem with Administration spending has been, and will continue, at least for the near future, to be wages and benefits. This is especially true for those already making more than would be justified in the local civilian job market. Questions that need answering include: Are labor contracts going to be negotiated by experienced personnel insulated from interference by the political process? Are management rights such as scheduling and promotions being protected in these negotiations? Have policies such as allowing the sell back of vacation time and sick leave been changed? Are automatic pay raises based on longevity and not accomplishment still being given? In short, i s the County taking the easy way out by cutting personnel and less essential services rather than getting to the heart of the matter by reducing wages and benefits to those warranted by the job market? Only time will tell whether our local politicians have the courage to make real, lasting changes that will get what have been unsustainable spending practices under control.