Wednesday, September 24, 2014

Pinellas County PSTA Interlocal Agreement Review - Section 6 Continued



Pinellas County Voters are being asked to approve a law (The GreenLight Plan) that would provide for an open ended 1% increase in the County sales tax.

You can read a review of the actual law you will approve if you vote yes at Sales Tax (GreenLight) Ordinance Review

Due to pressure from opponents of the Greenlight plan and the Sales tax ordinance, the Suncoast Transit Authority and the Pinellas County Commission found it necessary to develop the Interlocal Agreement before the election to add some direction to how the revenue from the 1% sales tax will be spent and to attempt to add some clarity regarding the suspension of the current PSTA Ad valorem property tax. 

DISCLAIMER:
The following document is a reproduction of the Pinellas County Interlocal Agreement with the Suncoast Transit Authority approved by the Pinellas County Commission.

The text of the Agreement appears in italics     My Comments appear in Bold regular text.

Section 6 continues.....
(B) If PSTA elects to impose an ad valorem tax pursuant to the authority granted by its Special Act while the Surtax is being collected and PSTA is entitled to receive Surtax Net Proceeds, the County shall be entitled to reduce the Surtax Net Proceeds distributed to PSTA in the amount of the ad valorem taxes collected by PSTA in each Fiscal Year in which it imposes an ad valorem tax. If PSTA discontinues such ad valorem tax levy, in the County's sole discretion, the County may begin distributing the full amount of the Surtax Net Proceeds to PSTA.

Note that the County is entitled to reduce the funds going to PSTA but they are not obligated to do so. The County cannot cause PSTA to default on any bonds or obligations.

Should PSTA get into financial trouble, which most of these train projects do, then the only options the County has are to bail out PSTA with their funds or allow the property tax to go back into place.

Since these train projects have been known to put Counties on the verge of bankruptcy the County's most logical move would be to agree to put the burden on you the tax payer through restarting the property tax.

(C) Notwithstanding the foregoing or any other provision of this Agreement, in the event PSTA imposes an ad valorem tax as contemplated by this Section 6, the County may take any action it deems necessary and is legally required to permanently reduce the levy of the Surtax; provided, however, the County shall use its best efforts to ensure that at the time any such permanent reduction is made, the reduction shall not exceed the amount of ad valorem taxes collected by PSTA in the immediately prior Fiscal Year.

This one is interesting.

It allows that the County may take any legal action to reduce the sales tax revenue should PSTA implement the ad valorem tax. The referendum, however, sets the amount at 1%. The question is would it take a new referendum to permanently reduce the amount.

The more likely scenario would be that all or most of the sales tax revenue would be pledged to obligation bonds. PSTA would need ad valorem tax revenue to operate. Since the bond pledge is a legal covenant, the County could not reduce or with hold the revenue from the sales tax necessary to meet the bond obligation.

Short form: You the tax payer get stuck with a new property tax and a 1% sales tax.

(D) If PSTA's Special Act is amended to eliminate PSTA's authority to levy an ad valorem tax on real property in the County, this Section 6 shall be of no further force and effect.

Probably not going to happen. The Legislature has already indicated it will not take up the PSTA request regarding property tax relief.

Watch My Video Green Light - It's a Bad Law before you vote.

E-mail Doc at: dr.webb@verizon.net. Or send me a Facebook (Gene Webb) Friend request. Please comment below, and be sure to share on Facebook and Twitter.
Disclosures: Contributor to
No Tax for Tracks.
submit to reddit

No comments:

Post a Comment