FPL franchise fees - Part TWO – Local Taxes. Will this government pass through tax collected by FPL end for Palmetto Bay? Unincorporated Miami-Dade County Budget is “threatened” with the loss of Background provided in a Miami Herald article of December 2018

Part II of a continuing Palmetto Bay educational series. Part I provided the initial background, clarifying that Palmetto Bay runs on much more than just the annual property tax/ Part I focused on one of the additional sources of revenue: FPL's franchise fees.  This is not a fee paid by FPL, to the contrary, it is a customer paid tax, a subtle pass through tax consisting of 3-6% of your electric service charges that FPL merely collects through your electric bill. Please see my Part I of this series: December 26, 2018, Local Taxes. FPL franchise fees - Part I - what are they? Background provided in a Miami Herald article from July 2017 as well as Palmetto Bay's budget

There is more going on here than a simple stealth tax. Palmetto Bay has significant capacity to adjust the municipal property tax millage rate to compensate. 2.2387!  I remain proud of leading the Palmetto Bay village council to REDUCE the property tax millage rate to an all-time low of 2.2387. See where I led Palmetto Bay to reaffirm fiscal responsibility & government lite. Palmetto Bay is protected from adverse results if FPL should no longer collect and remit the franchise fee.  A cessation of collecting the FPL franchise fee (tax) paid by electrical service consumers hits governments hardest that are near or at their maximum millage allowable.

So Palmetto Bay is really not at risk should Florida Power and Light follow through on its threat to Miami-Dade County, in stating (or posturing) that it no longer wants to collect a 3 percent tax from its customers outside city limits in Miami-Dade, effectively ending renewal talks with the county. FPL has NOT – I repeat, has NOT, made a similar statement to Palmetto Bay, at least during my term of office.

But for background on the comments and concerns relating to Unincorporated Miami-Dade County, See Miami Herald online - a good background read: FPL talks break down, and Miami-Dade loses nearly $30 million a year for suburbs, by Douglas Hanks, December 19, 2018

As reported in the Herald:

“As you know, franchise agreements have no impact on a regulated utility’s responsibility to serve every home and business in its service area,” wrote White, head of external relations in Miami-Dade. “FPL has proudly provided electric service across most of Miami-Dade for the last 90 years, and we look forward to continuing to serve our customers well into the future.”

The county’s loss would be suburban rate payers’ gains once the current agreement expires in 2020. The franchise fee in unincorporated Miami-Dade is set at 6 percent, but credits allowed for property tax bills that FPL pays typically result in a monthly fee of between 3 percent and 4 percent, according to the county.

Miami-Dade released updated budget forecasts Wednesday showing the lost franchise revenue dramatically increasing deficits for county operations in the Unincorporated Municipal Services Area (sometimes called UMSA). The deficits arrive in 2020, and hit $84 million worth of red ink by 2025. That’s far worse than the earlier forecast with millions of franchise-fee dollars, when the deficit only hit $58 million.

For even more information, Also see Seen this charge on your FPL bill?, Help Me Howard on WSVN, October 3, 2018,

This is more food for thought, a small bite, and additional background on this developing potential issue. This is a mere set up to Part III when I will post who this really impacts, what groups really benefit and where the costs of government are shifted to should the FPL Franchise gravy train ends for local government.

Stay tuned. 

Eugene Flinn