Florida judge upholds voter-passed county transportation sales tax
June 20, 2019
More than six months after last year’s midterm election, a Hillsborough County, Fla., judge recently ruled that a voter-approved 1-cent sales tax exclusively for transportation funding may continue in what amounts to a split-decision in the case.
On Monday, June 17, Judge Rex Martin Barbas of the 13th Judicial Circuit Court for Hillsborough County approved of a 1-cent tax that voters favored last November. Revenue from the tax will go only to transportation projects.
In December 2018, approximately one month after voters approved of the transportation charter amendment, Hillsborough County Commissioner Stacy White filed a lawsuit to stop the measure from being enacted.
Although the court has allowed the surtax collection to continue, nearly half of the sections within the article were removed or changed to give constitutional power back to county commissioners.
Article 11 of Hillsborough County Charter
Last summer, a grassroots group called All for Transportation asked county voters to get a measure on the November ballot that would provide much-needed funding for transportation. According to the group’s website, Hillsborough County, which includes Tampa, has a $9 billion backlog of transportation projects.
Tired of the government kicking the can down the road, organizers tried to convince citizens to take matters into their own hands. It worked.
The petition garnered enough signatures and was included in the November ballot as County Amendment 2. The amendment would create a 1-cent sales surtax levied for 30 years and deposited in an audited trust fund with independent oversight. Estimated annual revenue is $276 million, with $552 million in the first two years.
On Nov. 6, the measure, which would become Article 11, passed with 57.3% of voters voting “yes.”
Proceeds of the surtax are supposed to go into a trust handled by the circuit court clerk. The board of county commissioners will appropriate county funds to the clerk each year. An independent accounting firm is to conduct an annual audit of the distribution and expenditure of the money.
According to the original amendment, 54% of proceeds were to go toward roads and safety, including reducing congestion, improved intersections, fixing potholes, crash reduction and new walking/biking options.
Another 45% was set aside for expanding transit options, with the remaining 1% of funding for independent oversight. None of the revenue was to be used for expanding right of way or width of the interstates or constructing any facility not related to transportation, including a sports facility.
The surtax went into effect on Jan. 1. However, a lawsuit put the tax collection in jeopardy, despite the wishes of the voters.
County commissioner’s lawsuit
On Dec. 4, Hillsborough County Commissioner Stacy White filed a lawsuit against the amendment approved by voters. According to the complaint, White claims that the creation of the surtax is in conflict with his duties and obligations as commissioner. In particular, it takes away power given to commissioners to distribute funds as they see fit. The lawsuit also challenges the independent oversight created by the passage of the amendment.
White said the surtax cannot be created unless it is consistent with Florida statutes regarding county taxes. Article 11, he claims, violates several of those statutes. White wants to stop the collection of taxes before they are “invalidated,” and the county is left with “a mess to clean up,” according to the lawsuit.
With proceeds likely to exceed billions, the county could be on the hook for a significant amount of money if the surtax is invalidated after collections have already begun.
More specifically, White took issue in his lawsuit with the independent oversight, which would include “an unelected, unbonded and unpaid committee of private citizens who are given substantial powers over the huge fund,” the lawsuit states.
Furthermore, Article 11 prevents the Board of County Commissioners from using any of the money for certain additional lanes or to build certain new roads for the next three decades, even if the board unanimously agrees it would be needed.
White also argues that the charter violates a rule that requires only one subject per charter, claiming Article 11 addressed several subjects.
Lastly, White claims the ballot measure language was misleading, stating that the summary did not tell voters that the Hillsborough Area Regional Transit will always receive 45% of funds regardless of what the board deemed necessary and appropriate. Also, the summary did not include the exclusion of new roads and lanes.
To avoid any future conflicts with the transportation surtax that may arise, White asked the courts to deem Article 11 unlawful, invalid and unenforceable.
Courts validate transportation tax … mostly
Addressing the issue of the single-subject requirement, Judge Barbas noted it is true that amendments can be made through citizen initiative given it embraces only one subject. Despite White’s arguments, Barbas concluded the overall, single subject of transportation was the focus of the measure, thereby passing the single-subject test.
Regarding the ballot measure language, Barbas found the ballot summary satisfied all applicable laws. The summary states the levy of a 1-cent sales surtax over the next 30 years to be shared among Hillsborough County, its municipalities, Hillsborough Area Regional Transit, and the Metropolitan Planning Organization for the purpose of financing countywide transportation and road improvements. The court found no substantial ambiguities with the summary.
However, the court sided with White on his argument regarding constitutionality. Sections 5-10 of Article 11 tell the Board of County Commissioners how to spend the money. These are the parts that specify which type of projects get what percentage of the proceeds. Since those rules were established by voters and not the county commission, Barbas found them unconstitutional as it is the commissioners’ job to make those determinations based on state law.
The court then had to determine whether or not the elimination of Sections 5-10 required the elimination of the entire Article 11. Barbas ruled that the remaining six sections were not invalidated by the elimination of the other five sections.
“It is evident that the voters of Hillsborough County desire to improve transportation needs,” Barbas wrote in his judgment. “It is further obvious to this court that the electorate made their desires clear. The Constitution gives the power to apply sales taxes. The legislature has given certain counties the right to issue sales taxes under certain conditions. Therefore, those conditions must be followed if we are to be governed by law.”
A partial victory for both parties, the collection of the 1% surtax increase will continue for the next 30 years. However, the county will not adhere to the percentage allocations in the original petition, allowing the commissioners more freedom to distribute the funds how they see fit.
The provisions banning the use of funds for certain new lanes/roads and construction of facilities not related to transportation were also removed. County commissioners will be allowed to use the tax proceeds for such needs.
Lastly, the section giving the independent oversight commission power to approve project plans was also taken away, putting that power back into the hands of the Board of County Commissioners.