The amicus curiae, CITY OF FORT LAUDERDALE, CITY OF HOLLYWOOD, CITY OF POMPANO BEACH, and TOWN OF DAVIE, are municipal governments (hereinafter collectively the “Municipal Governments”) that represent approximately 550,000 citizens of Florida. Both the Municipal Governments and their citizens are consumers of electricity provided by investorowned utilities (the “IOUs”), and rely upon consistent and dependable service for their activities every day. Maintaining reliable electrical service is critical for the economic well-being of the Municipal Governments and the citizens they represent.
The Municipal Governments also collect taxes and fees from the IOUs in order to provide essential services to their citizens. The Municipal Governments have franchise agreements with the IOUs that allow the IOUs to use the Municipal Governments’ right-of-ways in exchange for franchise fees. The substantial and valuable property of the IOUs is also subject to property tax by the Municipal Governments. If those taxes and fees are reduced or eliminated, the Municipal Governments will face significant budget shortfalls to the detriment of their citizens.
The Proposed Amendment may significantly reduce the Municipal Governments’ revenue by eliminating or reducing franchise fees and reducing property values. As expressed in the Financial Impact Statement, there will be “significant costs to state and local governments to transition to a fully operational system,” and that “several government revenues would be reduced.”
The Municipal Governments believe these financial repercussions will be substantial. There will be significant reductions in franchise fees, property taxes, and municipal taxes which are critical revenue sources for the Municipal Governments.
The Proposed Amendment will likely also significantly reduce the Municipal Governments’ property tax revenues by reducing the fair market value of the IOUs generation properties. The FIEC reported that the IOUs “showed nearly $2.2 billion in real property just value and nearly $42.8 billion in tangible personal property just value across the state” in 2018.
In sum, if the Proposed Amendment becomes law, the Municipal Governments, as well as potentially hundreds of other local governments, will likely lose millions of dollars in revenue every year. The Municipal Governments rely on franchise fees and property taxes to provide essential services to their communities. To make up for the dramatic reductions in income, the Municipal Governments will be forced to either reduce essential services or increase other taxes and fees.
Read their full legal brief filed with the Florida Supreme Court here.