Big Spending Ignites Revolt in Palm Beach

Published October 1, 2005

Until its Election Day 2000 debacle with butterfly ballots and hanging chads, Florida’s ritzy Palm Beach County was best known nationally as a winter playground for the rich and famous. It had polo grounds, pricey shops, the Kennedy family compound, and Donald Trump’s posh golf resort. It is the headquarters of Rush Limbaugh’s “Southern Command.”

Soon, however, Palm Beach County may become known for something many would not have expected. It could be the site where the subtropical equivalent of the Boston Tea Party ignites a tax revolt that some taxpayer advocates would like to take statewide.

Tax Protesters Demonstrate

When the big-spending Palm Beach County Commission met in West Palm Beach on September 8 to pass a budget for the fiscal year beginning October 1, anti-tax protesters staged a demonstration in the plaza outside. That rally may have marked the opening round of an effort to bring a Taxpayer’s Bill of Rights to the county and the state of Florida.

The trigger for the incipient tax revolt isn’t difficult to spot: Real estate prices have soared in the county. A new study by National City Corporation found home prices in the West Palm Beach metropolitan area were not only much higher than they were just five years ago, but they’re 46 percent higher than they ought to be.

The housing “bubble” has been a boon to revenue-hungry local governments. Florida’s Truth in Millage (TRIM) law requires local officials to lower property tax rates to offset rising values–or else notify taxpayers of a pending tax increase. All over Florida, however, local governments awash in new revenue have found new ways to spend the money.

Counties Spend Windfall

Anti-tax leader John Hallman, a Palm Beach County resident and Florida director of the nonpartisan free-market think tank and lobbying group FreedomWorks, said, “Unfortunately, the county government has decided to spend the windfall instead of giving some relief to property owners. Now citizens are feeling the crunch. Their county government’s spending has increased much faster than the rate of inflation and population growth.

“These county commissioners need to show some restraint in spending, or else Florida and Palm Beach County will endure the long-term economic consequences that California has painfully experienced,” Hallman continued.

Hallman’s concerns are shared by John R. Smith, chairman of BIZPAC, a coalition of business leaders.

“For the third consecutive year, when county commissioners have learned they would have a windfall increase in property tax revenue, they have proceeded to adopt a higher budget that spends it,” Smith said. “A number of business leaders think the best way to stop this is to explore adopting a Taxpayer’s Bill of Rights for Palm Beach County or the state of Florida, to limit the growth of property taxes from year to year.”

Proposal Dismissed as ‘Insane’

Burt Aaronson, a member of the county commission’s high-spending faction, dismissed as “absolutely insane” the notion of imposing a formula limiting future tax hikes to no more than the rate of inflation and population growth.

Aaronson told the South Florida Sun-Sentinel: “They [tax protestors] can pack whatever chambers they want, and they can scream and rant all they want. This is one vote they’re never going to get on their side.”

Commented J. Robert McClure, president of Florida’s James Madison Institute, “Commissioner Aaronson’s testy response was directed at the protesters, but his tone suggests he may have underestimated the growing anti-tax sentiment among Florida residents in general and the residents of pricey Southeast Florida counties in particular.

“Although Palm Beach’s wealthiest residents may not even notice property tax hikes from one year to the next, there are thousands of middle-income working families who will,” McClure noted. “And as California’s ruling elite discovered when the late Howard Jarvis began his campaign to pass Proposition 13, it would be a mistake to ignore them.”

Robert F. Sanchez ([email protected]) is director of public policy at the James Madison Institute, a nonpartisan policy center in Tallahassee, Florida.