Truth Check: No Tax for Tracks Permanency of Greenlight Tax Hike Claim is “In the Light”.

The Greenlight Tax, if enacted, will never face another vote to repeal it again.
This is most likely the last chance that voters will have to reject he Greenlight Tax – the highest sales tax in the state.

“We will never be able to vote on this again.”  No Tax for Tracks assertion on the Greenlight Pinellas tax.

No Tax for Tracks, the grassroots group working to stop the Greenlight Pinellas tax hike, describes the method of removing the tax in this way: “We will never be able to vote on this again.”  Sunbeam Times has done a Truth Check on this assertion and found it to be “In the Light”, meaning it is a truthful statement backed by facts, and in this case, experience and legal contracts.  The tax does not sunset every ten years as with the Penny for Pinellas, citizens are banned from launching a ballot initiative to repeal the tax, and the Interlocal agreement on Greenlight has no provision for a voter repeal. Finally, the only mechanism to get a repeal would be for the local government to allow the citizens a chance to vote to repeal the tax, something that is incredibly unlikely.  The Truth is thus revealed by No Tax for Tracks regarding the Greenlight Pinellas tax: Citizens will never be able to vote on this again. Any assertion to the contrary relies on a strained understanding of how our local government treats tax money and debt.

The Ballot language

The Greenlight Pinellas referendum reads as follows on the ballot:

COUNTY REFERENDUM QUESTION

Levy of Countywide One Percent Sales Surtax to Fund Greenlight Pinellas Plan for Public Transit

 Shall the improvement, construction, operation, maintenance and financing of public transit benefitting Pinellas County, including an expanded bus system with bus rapid transit, increased frequency and extended hours, local passenger rail and regional connections be funded by levying a one percent sales surtax from January 1, 2016 until repealed, with the proceeds deposited in a dedicated trust fund?

So the tax would be in effect until it is repealed. This raises the questions as to how such a repeal could occur. The longevity of the tax is subject to the “Interlocal Agreement” between the PSTA and Pinellas county as well as the Pinellas County Charter. The Tax should also be evaluated in the context of other taxes passed by referendum in Pinellas, namely the Penny for Pinellas tax and the history of tax treatment by local government.

No Sunset as in Penny for Pinellas.

The gold standard for local surtaxes approved by voters in Pinellas County is the “Penny for Pinellas” Tax. This local option surtax sunsets every ten years unless approved by voters. The Greenlight Pinellas tax does not do that. By this standard, No Tax for Tracks is correct that “We will never be able to vote on this again.”

County Charter Prohibits Citizen Amendments on Taxes.

The County Charter also specifically prohibits any citizen group from launching a referendum to repeal any tax whatsoever (Section 6.04 – link below). Citizens can launch an initiative to, for instance, ban the caging of pregnant pigs in the County (as was done for the state Constitution), but could not launch one to repeal the Greenlight Pinellas tax. The tax could be repealed by a vote of the County Commission to allow the citizens to vote to repeal the tax. It is a near certainty that the local government will never take an action to repeal a source of revenue to the government totaling $148 million. By this standard, No Tax for Tracks is correct that “We will never be able to vote on this again.”

The Greenlight Pinellas Contract does not Allow a Voter Repeal

The Interlocal agreement defines the means by which the Greenlight tax would be repealed. The tax would be in effect for 50 years initially and then renew automatically for 20 year periods after that unless some very unlikely things happen. The PSTA would need to declare the Greenlight Plan “Complete”. This is very unlikely as rail systems typically keep growing, with new lines added as others are completed. Other means of ending the tax include the PSTA voluntarily ending the program, which would go against the public transit mission of the agency. Other means of terminating the tax include a default on payment form the trust fund, a change in state or Federal law that would undermine the tax or PSTA spending money from the tax outside of the Greenlight plan (but they could just redefine the Greenlight plan – with county government approval – to avoid this problem). It should be noted that none of the events require a vote of the citizen. By this standard, No Tax for Tracks is correct that “We will never be able to vote on this again.”

The Sales Tax Proceeds will be Pledged to Secure the Greenlight Debt for 30 to 35 Years.

Further, the future tax revenue will be pledged against planned government-issued bonds and Federal loans to fund the Greenlight plan.  The Greenlight tax, though it would create the highest sales tax in the state, would still be over $1 billion short to fund the train requiring loans to build it. Thus the local government would need to directly borrow $156 million from 30 year 5% bonds issued by Pinellas County plus an $822 million 4% loan over 35 years from the federal govt to Pinellas County.  That would create about $851 million in interest over time at those interest rates (loan data from pages 9 and 10 of PSTA’s Greenlight financing analysis).  So there can be no option to allow a repeal of the tax since that would lead to a default on the bonds  Politicians of the future will deny placing this before the voters again since they would assert the government would default on the bonds.

Local Government Would Have to Allow a Citizen Vote to Repeal the Greenlight Tax.

Given the incredible effort put into passing Greenlight, with government, politicians and large corporations colluding for years to get this tax passed, it is a safe bet that the local government would never allow citizens a vote to repeal the tax (especially considering the bond obligation). While the No Tax for Tax claim that “We will never be able to vote on this againcould be viewed as inaccurate since it uses the word “never”, it is a very safe assumption that citizens will never get a chance to vote on this tax again given the nature of government, taxation and the pledge on the debt. By these standards, No Tax for Tracks is correct that “We will never be able to vote on this again.”

 No Tax for Tracks gets it right. If voters pass the Greenlight on 11/4, it will certainly be the last time the voters ever have a chance to vote it up or down again. There statement is “In the Light” as it sheds light on the truth about this tax.

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References:

Charter language

http://www.pinellascounty.org/homerule.htm

From Section 6.04: “The power to amend, revise, or repeal this Charter by citizens’ initiative shall not include amendments relating to the county budget, debt obligations, capital improvement programs, salaries of county officers and employees, the levy or collection of taxes, or the rezoning of less than 5 percent of the total land area of the county.”

 


PSTA-County Interlocal Agreement on the Greenlight Tax

REDUCTION AND TERMINATION OF SURTAX. Upon the earlier of:

(A) completion of all steps to finance (including without limitation debt incurrence,and/or execution of public-private partnerships or leases), acquire, and/or construct all projectsand capital improvements contemplated in PST A’s Greenlight Plan, as mutually determined by PST A and the County (if the parties cannot mutually determine whether PST A’s Greenlight Plan has been completed, the parties shall engage a nationally recognized transit consultant acceptable to both Parties to make such determination);

(B) PSTA’s decision to discontinue such steps to finance, acquire and/or construct substantially all of the projects and capital improvements contemplated in PST A’s Greenlight Plan;

(C) the occurrence of a Force Majeure;

(D) the fiftieth 50th anniversary of the date the Surtax is first levied and each 20th anniversary thereafter;

(E) a payment default under the Trust Agreement; or

(F) PSTA applying Surtax Net Proceeds for a purpose other than PSTA’s Greenlight Plan,

the County and PSTA shall meet to discuss the particular event described in clauses (A) through (F) that has occurred and shall consider, depending upon the event, revising this Agreement, revising or adding to PST A’s Greenlight Plan, seeking further authorization for additional uses by PSTA of the Surtax Net Proceeds or reducing or increasing, if there has been a  previous reduction and subject to the limitations of the Surtax Referendum, temporarily or permanently, the Surtax Net Proceeds. If the Parties are unable to agree on what action, if any, to take, after making a good faith effort, the County may take any legally required action to reduce the Surtax Net Proceeds distributed to PST A. In determining what action to take, if any, pursuant to this Section 9, the Parties shall comply with the provisions of Section 29(B) hereof.

 

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