Q&A of the Day – Part 2 How Efficient Are Florida’s Local Governments?
Each day I feature a listener question sent by one of these methods.
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Today’s Entry: Hi Brian & Joel, Hope you gentlemen are doing well! Is there any metric on Florida county government efficiency? I ask because Palm Beach County keeps adding or attempting to add 1% sales taxes. In Palm Beach County we have the highest legally allowed gas taxes in the state. Does Palm Beach need its own version of DOGE? (Department Of Government Efficiency)
Bottom Line: In yesterday’s Q&A I shared with you the information about Florida’s two versions of DOGE at the state level. The state’s Government Efficiency Task Force, established by voters in 2006, and Florida’s Local Government Efficiency Task Force, established by state law in 2020. The recommendations by these task forces have been instructive and the state’s willingness to act on them has been highly effective. These two task forces having been contributing factors in Florida having been identified as providing the best taxpayer ROI of any large state in the country (2nd overall), in addition to operating the most efficiently of any large state in the country (4th overall). Let’s hope Elon Musk and Vivek Ramaswamy have similar success at the federal level. In any case, the question about government efficiency was specifically asked in reference to Palm Beach County. So, about that...
Unlike the setup we have with the state agencies, we don’t have efficiency task forces at the county level (though perhaps we should). We do, however, have Florida TaxWatch. The nonprofit watch dog has long analyzed our state and local governments for government efficiency. As stated, as part of their mission: Florida TaxWatch works to improve the productivity and accountability of Florida government. Its research recommends productivity enhancements and explains the statewide impact of fiscal and economic policies and practices on residents and businesses. I’ve long leaned on the research of Florida TaxWatch for questions like this one.
Last year Florida TaxWatch produced a study called: How Florida Counties Compare. As a setup for the report's findings, they said this: Local taxing and spending is a major part of Florida government operations. More than half of all Florida government revenue (54.6 percent) is raised at the local level, the largest share in the nation. Florida’s 67 county governments, more than 400 municipal governments, and approximately 1,300 independent special districts spend more than $137 billion annually. This guide compares the revenue and expenditure profiles of Florida’s 67 counties to give taxpayers an overview of how their local government stacks up with the rest of the state. The report presents the most recently available data regarding property taxes, other taxes and fees, county and municipal revenues, county and municipal expenditures, and other related measures. Per capita figures are determined by using population figures for the year for which the data are used. So, with that, let’s dig in.
The question was specifically about Palm Beach County and for this exercise I’m going to include the rankings of Martin and Indian River as well.
Total per capita property tax collections (out of 67 counties):
- Palm Beach 4th highest (58% above state average)
- Martin: 5th highest
- Indian River: 15th highest
Now much of that is a result of property values which tend to be well above the state’s average in all three counties, though the tax collection is relative. This number alone doesn’t specifically speak to government efficiency; however, it helps to begin to paint an overall picture.
Per capita county property government tax collections:
- Palm Beach 8th highest (40% above state average)
- Martin: The highest in Florida (104% above state average)
- Indian River: 14th highest
Interestingly, Martin which is generally viewed as a friendlier tax jurisdiction than Palm Beach County – isn't in terms of what the county specifically collects. Not many would likely suspect Martin County to impose the highest relative county taxes in the state but that’s the case. Meanwhile we continue to see that Palm Beach County imposes one of the highest burdens in the state as well.
Per capita municipal government property taxes:
- Palm Beach 3rd highest (77% above state average)
- Martin: 19th highest (below state average)
- Indian River: 25th highest (below state average)
So, as we look at what municipal governments access for residents who live within municipalities in these counties, we see that Palm Beach County’s municipalities impose the third highest taxes within the state, which when coupled with what the county imposes accounts for why Palm Beach County has the 4th highest overall burden in the state. But that breakout is about property taxes specifically. What about the whole ball of wax?
Per Capita Total County & Municipal Government Revenue:
- Palm Beach 11th highest (11% higher than the state average)
- Martin: 19th highest (below state average)
- Indian River: 25th highest (below state average)
What this illustrates is that on balance Martin and Indian River’s total tax burdens are lower than the statewide average and far lower than Palm Beach County’s (about $1,000 less in taxes annually per capita). We also see that Palm Beach County’s elevated tax burden (both at the county and municipal level) disproportionately leans on property taxes as a means of collection. You’d also mentioned that Palm Beach County has the highest allowable gas tax, which is true (though most counties in the state are at the same level too). Palm Beach County’s gas tax burden is 4% higher than the statewide average. Last but not least you’d referenced what are known as local option sales taxes (taxes requested by local tax authorities that require voter approval).
Unsurprisingly Palm Beach County ranks above average in that category as well with local option sales tax revenue per capita checking in 6% higher than the state average.
Palm Beach County has above average tax burdens in every category on a relative basis. Often, well above average. Officials would say that the services offered by the county make the higher burdens worthwhile. That’s obviously subjective. But what’s clear through this exercise is...
- Palm Beach County’s total tax burden, on an adjusted basis, is one of the highest in the state
- Municipal governments are generally less efficient than the county
- The county disproportionately relies on property tax revenue
Is there room for efficiency improvements? Almost certainly, regardless of one’s view of the services offered by local governments. Though speaking of local governments, municipal governments appear to be far less efficiently run, on balance, than the county.