Where does your money go? Part Two

Can this affect our property taxes? Of course!

In many previous posts, I have advocated for a scrutiny of our local governments.

Our property taxes have not decreased substantially, and have even increased sometimes, in spite of the crashing reductions of real estate values.

Our cities and counties tenaciously oppose every move in the sense of controlling their budgets. Property values go down? They raise their “millage” (tax percentage applied on the property value to determine the actual tax.) Tax reduction mandates? No problem, they start charging for previously free services, or increase their present fees.

If they were half as diligent in spending our money, as they are charging us, perhaps we could avoid these excesses.

I read this in the South Florida Business Journal – Nov. 11, 2008:

Wackenhut billings come under scrutiny in Broward

Broward County auditors are raising red flags over how county agencies kept tabs on nearly $6 million in billings by Wackenhut Corp. for security services last year.

In a report to be presented to county commissioners on Wednesday, county auditors noted several problems with the way Wackenhut invoices have been processed.

Specifically, the report noted that county personnel were not reviewing and validating daily entries on security logs that document hours worked by guards. The audit also found that there was no evidence that hours billed were hours actually worked.

County Auditor Evan A. Lukic said the decision to review the county’s oversight of Wackenhut grew out of news reports earlier this year that alleged the Palm Beach Gardens-based security company was overbilling Miami-Dade County for services that were not performed.

“We were concerned about the allegations we heard and whether we were possibly experiencing the same thing here,” he said. “We wanted to look at it from how are we controlling the contract and administering it.”

At this point in the auditing process, Lukic said, there was no evidence Wackenhut engaged in any wrongdoing. However, based on the audit’s findings Lukic said his department will take a closer look at payments to “make sure that guards who we are paying for are present.”

In June 2005, Broward County entered into a three-year agreement with Wackenhut to provide security services. Payments for fiscal years 2005, 2006 and 2007 totaled more than $14.8 million.

In fiscal 2007, Broward County’s Aviation Department topped the list with $2.1 million in security services billings by Wackenhut. The county’s facilities maintenance division paid out $1.66 million to Wackenhut, and the county’s library division was billed nearly $633,000.

The report found that during a one-week period, the libraries division paid 233 hours of overtime for security guards and found no evidence that Wackenhut provided the required written notification and payroll documentation to substantiate the overtime payments.

When queried by the South Florida Business Journal about the auditor's findings, Wackenhut issued the following statement: "We've worked closely with facilities management through the audit department to insure compliance and to improve our processes."

Questions also have been raised about matching guard qualifications to pay rates. In some instances, the audit raised concerns about guards with lesser qualifications billing at a higher rate, resulting in overcharges.

In an Aug. 22 letter, Broward’s director of the facilities maintenance division advised Wackenhut President Drew Levine that he would now require the company to provide documentation that links guards’ qualifications with their job classifications.

In the meantime, Lukic is asking the Broward County Commission to direct the county administrator to come up with procedures to ensure that billings are validated, that the guards’ qualifications match their job descriptions and that overtime charges are substantiated.

In May, a Miami-Dade County audit found that Wackenhut overbilled the county by as much as $6 million over three years for services it did not provide to Miami-Dade Transit, and then falsified records to cover up the over charges.

In its response to that audit, which Wackenhut published on its Web site, the company said it has cooperated with the county’s investigation, but “continues to question the audit methodology.”

Wackenhut said a lawsuit by a former guard, who accused the company of padding its bills, has caused the increased scrutiny.

“It is Wackenhut’s belief that county entities … have been placed under undue pressure and influence by unsubstantiated allegations in this ongoing disputed litigation,” it stated.

Miami-Dade continues to review Wackenhut’s response to determine what actions should be taken, county spokeswoman Suzy Trutie said.

***********

My opinion:

Wackenhut has the audacity of "questioning" the “audit methodology”. Am I understanding this? Of course not. Am I agreeing to this? Of course not. Do I believe the hypocritical “findings” of the Miami-Dade and Broward County authorities three years after the facts? No way. Now that the money has been spent, they "discover" that the services they paid for were not even provided. And we are talking millions of dollars. What about all these people we are paying to take care of our money? Good question.

By the way, how many millions will this Marlins stadium cost the tax payer? Was it 800 million, 700, 900, a billion? God knows. And we will know in a few years, after the bills are paid and we find again ourselves in a big hole. But don’t worry, they will find a way of raising money to cover it all. Your money. And my money too; subsidizing a business, which market value will increase exponentially after they get their free stadium.

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.Visit my website: http://www.condo-southflorida.com/where you can search for Aventura Condos, Florida Condos,

More on Tax Increases

The good, the bad, and the sneaky.

September 19, 2008

More on "Did I tell you so ?"

This time it's Pembroke Pines.

Did I already write on new ways our local governments find to hit us back after we got a small reprieve in property taxes?

Well, it's happening. Every day.

Read 02/19/08 in the Sun Sentinel:

Pembroke Pines: Utility rates to rise 25%

Utility rates in the city will jump by 25.36 percent beginning Oct. 1.

The rate hike, which will generate $2.5 million for the 2008-9 fiscal year, will fund utility projects. The increase received final approval from the commission Wednesday.

Homeowners who use 3,000 gallons of water each month would pay $24.44 per month, up from $19.50. Homeowners who use 6,000 gallons per month would pay $49.49, up from $39.48.

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.Visit my website: http://www.condo-southflorida.com/where you can search for Aventura Condos, Florida Condos,

Supreme Courts strikes out amendments from ballots

Governor Crist had high hopes that Justices would finally line up with the proponents of the amendments to be included in November ballot.

They unanimously (7-0) decided that the titles and summaries on the proposed ballot were misleading to the voters.

We will have to wait for the Florida legislators to address the issue again. They have two years before new constitutional amendments can be voted.
I personally believe that the issues were too important to be dealt with the sort of casualness it drew from our elected officials, who were perhaps too busy to spend the necessary time and attention.

The Legislature did not come out with a reasonable solution to high property tax woes, notorious for afflicting residents and out of state property owners.

The proposal by the Taxation and Budget Reform Commission was evidently a partisan approach, in its attempt to sneak in the constitutional amendments, school vouchers plans which would have forced taxpayers to subsidize religious schools. Justices' opinion was that these considerations was completely out of the scope of this commission which meets every twenty years.

School boards were evidently relieved. Teachers, bus drivers had fought the proposal since its inception. Funding for schools would be been guaranteed for only one year, leaving at the whim of the legislature's disposal to thereafter replace the traditional funding of schools through property taxes revenues.

We will not see an increase of our sales taxes by 1%, nor will services presently exempt, be taxed to replace the lost revenues of property tax reduction.

The Realtors Association was disappointed, since a tax reduction of about 25% for residents and non-resident property owners as well, would have been a shot in the arm for the real estate industry.

And what do I personally think? The truth is that real estate is my business and I would appreciate anything that could alleviate the downturn, attract buyers, and slow down foreclosures and short sales.

However, as a concerned citizen, I believe that swapping taxes is no solution.

Our schools system which is dead last in the US, should be respected and its funding cannot be left to the whim of an obscure Taxation and Budget Reform Commission that meets every 20 years. It is ridiculous that what our legislature could not accomplish in many long sessions, should be addressed in this manner.

I did not appreciate that the constitutional separation between state and religion could be compromised by these amendments, and that the voters would have been misled by a sneaky ballot summary that did not adequately inform about the long-term consequences of these amendments if they were approved.

I wrote it many times. Tax Swaps are a game that only postpones the reality check.

The problem must be solved by a balance between what property owners want to pay versus the services they want to be provided. This should leave out the happy spending, the unnecessary bureaucracy, and the excesses that we have seen in cities and counties budgets.

Efficiency, thrift and good management are the words I want to hear.
Threats of service cuts, and "tax swaps" are not the answer.

On the other hand, I don't believe that punishing those who do not own their residence, by increasing their sales taxes, and adding new taxes, is the best way to solve the problems of those who are lucky enough to own their home.


Here is the text published in the Sun Sentinel February 4th, 2008:

Property tax bills won't drop any time soon, but sales taxes won't go up, either.
And school funding will stay the same.

The state Supreme Court on Wednesday removed a multibillion tax swap plan from the November ballot, leaving supporters empty-handed for at least two more years in their quest for lower real estate taxes. Critics of the plan to eliminate most school property taxes said the ruling averts a potential disaster for public education.

The court issued the 7-0 ruling four hours after justices forcefully argued during a courtroom hearing that the ballot summary for Amendment 5 would have misled voters about its potential implications for school funding. The ruling is final.

The justices also knocked off the Nov. 4 ballot a pair of voucher amendments, in the latest twist in Florida's long-running legislative and legal battle over whether taxpayers' money can be used to send children to private religious schools.

In the tax case, justices said Wednesday that the amendment's 90-word ballot title and summary failed to give voters fair warning that the replacement revenue promised for schools was guaranteed only for the first year, 2010-11. After that, it would have been up to the Legislature.

The Amendment 5 plan would have handed a 25 percent tax cut to Florida property owners. But it could have jeopardized school funding, critics said, and led to a boost in the 6-cent sales tax and a state charge on services such as dry cleaning.

Gov. Charlie Crist, who backed the plan, said through a spokeswoman he was "disappointed the people will not have the opportunity to vote to lower their taxes."

"It really postpones significant, meaningful property tax reform for a long time, sadly," said John Mike, president of the Realtors Association of the Palm Beaches. Realtors now look to the 2010 election as the next chance to put a major tax initiative before voters.

Praise for the ruling came swiftly from the amendment's broad base of critics, from business interests worried about a services tax to teachers to some prominent Republican legislators. "Deep in my heart I knew that these were not good amendments for children, and that ultimately the American legal system would prevail," said Broward Schools Superintendent James Notter.

The Palm Beach County School Board chairman, Bill Graham, said the ruling is "almost Christmas and Hanukkah in September."

In the voucher case, the justices ruled unanimously to remove from the ballot two plans, Amendments 7 and 9, that would have set the constitutional groundwork for children to attend private religious schools at taxpayers' expense. At issue was whether vouchers would go beyond the scope of the appointed Taxation and Budget Reform Commission, which meets every 20 years to propose changes to the state's tax laws.Former Gov. Jeb Bush, a staunch supporter of vouchers, weighed in with a rare statement, saying the ruling was "extremely disappointing." Bush said the ruling places current voucher programs that subsidize more than 20,000 students in private schools in legal limbo.

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.Visit my website: http://www.condo-southflorida.com/where you can search for Aventura Condos, Florida Condos,

Property Taxes Battle Updated

Aug. 15, 2008

Judge John Cooper stroke Amendment 5 from Nov. 2008 ballot. The proposal to cut property taxes by about 25%, while raising sales taxes by 1%, and limit to 5% yearly increases in properties assessments, was ruled misleading since it didn’t give voters enough information about its potential threats to school funding.

The Legislature is required to compensate Florida Schools, only during the first year, actually 2010. The attorney for the Taxation & Budget Reform, the proponent of Amendment 5, indicated an almost sure appeal to Florida Supreme Court.

Opponents of the plan include the AARP, the Teachers’ Union, many business groups, and other organizations.

Florida Assoc. of Realtors’ president expressed disappointment since Amendment 5 would have substantially helped the struggling Florida Real Estate industry by lowering property taxes for residents, businesses and non-residents real estate owners.

While I am a realtor, I respectfully disagree. Florida real estate industry would be better served by sensible laws and making sure that our schools and education's funding are a priority.

Florida has already one of the worse schools system in the U.S.

The disdain that Amendment 5 shows to this top priority is what has caused a major upheaval.

Taking away their traditional funding, while promising them that, for only the first year, they would be guaranteed their previous funding is outrageous.

Not only does it leave to day-by-day legislators' discussions, agreements and disagreements, pacts and partisan rulings, the funding of what is Florida's future. It creates a gap that will be covered by new taxes, and raising our present sales taxes.

And, in all truth, the whole purpose of this ongoing battle is to protect our fat-cat cities, against any citizens' supervision over their out-of-control budgets; and to live in denial of our actual problems.

This is not a tax swap. For many Florida's residents, I would say perhaps a majority, it will mean higher taxes. Think about that: a majority of Floridian don't own their home. To punish them, we increase their sales taxes, and we put in jeopardy their public schools.

I am a realtor and I would surely benefit from lower property taxes propelling our hurting real estate market. But being shortsighted and selfish will actually do me more harm than good on the long term.

For more information and listings at the Terraces North at Turnberry, please visit my website: http://www.condo-southflorida.com/ where you can search for Aventura Condos, Hallandale Beach Condos, Sunny Isles Condos

On Florida Property Tax-Swap Amendment

By Henry B. Nathan August 6th, 2008

It looks like the proposal going on the November ballot has a chance to pass, now that Gov. Charlie Crist has said he will strongly endorse it.

I have already written about this subject. Let’s recap.

Basically, it will eliminate the schools part in property taxes. That would reduce everybody’s tax bill by more than 25% including snowbirds, businesses, real estate investors. How would the schools funding come from? Partially by adding 1% on Florida Sales tax.

That would leave a 8 billion gap which will have to be covered by additional sales tax on some services, budget reduction, and a few more things to be figured out by our legislators.

Against the plan are teachers, bus drivers, and other education-related workers, and many business groups, as well as legislators from both parties.

The fact is the magic of tax swaps have proved illusory and a cover-up of the lack of vision in addressing problems with common sense and realism.

I see with apprehension a centralizing of schools funding that will leave them under the complete economic control of state’s authorities, instead of their traditional funding through real estate taxes.

On the other hand, the money has to come from somewhere. In the end, the tax payer will be stuck with the bill, up to the last penny. That’s the essence of “Tax Swapping”. Will it hit harder certain sectors of our population? Possibly. Perhaps those who don’t own a home and would just suffer increased sales taxes and nothing in compensation.

That brings me back to my eternal predicament. Why can’t we just cut the fat? Bureaucracy, mismanagement, and waste are eating up a large part of our cities and counties’ budgets.

Luxurious city halls, generous pension plans, unnecessary duplication of services, you name it. Did you ever ask yourself why, in South Florida, we have dozens of police departments, fire departments, code compliance departments, water departments, administrators, sub-administrators, commissioners, city managers, and so forth, ad-nauseam?

And that brings me again to something that’s going on in our cities now. Forced to reduce a minimal percentage of their budgets by voters’ mandate, they have chosen to start charging for services that were always free. An ingenious alternative to “tax-swapping”, mind you.

The last one I heard about is some city starting to charge a hefty fee to drivers for any accident occurring on its territory, and many other municipalities quickly jumping on the bandwagon. Many other charges and fees are subtly sneaked in to replace the lost revenue. Increasing millage (percentage applied on assessed values to calculate taxes) is also been used by some cities to compensate for reduced assessed values. With some exceptions, they have mostly chosen the easy way out.

I am 100% for property tax reduction. It is a screaming necessity. It must be done now, because it’s hurting the ability of all layers of our society to buy and keep a home. It is a strong deterrent to out-of-state buyers of vacation homes and investors. Home building is a major job-creating industry in Florida, and many builders are all but bankrupt. So, there is no doubt that it is a priority.

On the other hand, I also think that the only way to accomplish this tax reduction is to live within our means. I do not believe in economic “stimulus” packages and other gimmicks and tax-swapping solutions.

That brings the question: OK, my friend, what would you do if you were in the Governor’s shoes?
I am not an economist. But I have a grain of common sense. The same sense that allows me to survive when my personal income is down.
The only answer that comes to my mind is: I’d just reduce the local governments’ income through reduced property taxes and let them deal with it. They will find the answer.
They were living with much less just a few years ago. If they can’t deliver, perhaps we will have to find somebody else to do the job. That’s what elections are for.

In the meantime, people are losing jobs in Florida while outsourcing is ever flourishing. Salaries are shrinking, middle class is receding, and population growth is negative.
I don’t think that the present recession will just end by itself some time in 2009 or 2010, as they want to make me believe. However, I am confident that, at some point, common sense will prevail and we will avoid falling into a major depression. Helping the development of our real economy and putting people to work should be the preferential vision of our elected authorities.
Meanwhile, our local governments are selfishly trying to maintain privileges and avoiding bold decisions.

Henry B. Nathan is a Florida Realtor at United Realty Group Inc. and a Florida Licensed Mortgage Broker.
Visit my website: http://www.condo-southflorida.com/
where you can search for Hallandale Beach Condos, Sunny Isles Condo