Few counties ask a children's trust to pay into its CRAs. Escambia looks to be an exception
Escambia County's vote Thursday for the Escambia Children's Trust to pay into the county's Community Redevelopment Agency districts puts the county in the rare position among the 11 counties with major children's service councils.
Broward County and Miami-Dade County are the only two counties with children's services councils that are members of the Florida Alliance of Children's Councils and Trusts that are required to pay into local CRAs, according to FACCT. The others are exempt either because the children's trust pre-dates any local CRA or the local governments have not requested it.
Escambia County commissioners voted 3-0 Thursday to officially request that the Escambia Children's Trust pay into its nine CRA districts. The payment requirement includes a $1.1 million back payment for the previous years of the Children's Trust's existence and the future collections would be at least $445,000 a year, depending on taxable land values.
Pensacola Mayor D.C. Reeves said earlier this week he would follow the county's lead and move to enact the same policy to request the Children's Trust pay into its three CRA districts.
An exact dollar figure of what the city would be owed wasn't available Thursday as city computer systems remained unavailable while officials continued to respond to an apparent cyberattack.
The number could be similar to the amount owed to the county or even higher, as property values in city CRAs are typically much higher than in the county CRAs.
Escambia County Children's Trust formally requested an exemption Wednesday to the requirement that it pay into the CRA.
Executive Director Lindsey Cannon told the News Journal that they would do the same for the city if that request were made.
Cannon said under the law creating the children's trust, any funds collected by the county or city would still have to be spent in a way that provides children's services.
"Our interest is just working in partnership," Cannon said. "We just want these dollars to go to our kids. That's what we want."
During a Children's Trust workshop Wednesday evening that was livestreamed on the Studio 850 Facebook page, Children's Trust board member Stephanie White expressed frustration that the first they heard about the county wanting to collect the trust tax revenue for the CRAs was in a notice letter.
Escambia County Commissioner Lumon May, who serves on the Children's Trust board, was not at the workshop on Wednesday.
Cannon confirmed to the News Journal that the notice letter the Children's Trust received on Friday was the first indication the county wanted to pursue the policy.
"They don't have to ask for those funds," Cannon said. "It's in statute that they can. So that's what I've learned through this process. And the ones in South Florida work collaboratively so that they're not duplicating services, obviously, but they get reports back for what those particular CRAs did with the funds so that they can share that out also with their community, so they know where their tax dollars have gone."
Cannon said the Children's Trust is waiting to hear the next steps for how their exemption request will proceed.
The Children's Trust was approved by voters in 2020 to levy a property tax of 0.5 mills to fund services for children. After its first year, the Trust rolled back its millage rate to 0.4365.
For each millage of property tax, a property owner pays 1/1,000th of the value in taxes, so an owner would owe $100 for every 1 mill of property tax for a property with a taxable value of $100,000.
The Children's Trust brings in about $10 million yearly in property tax revenue.
What is a CRA?
A CRA is a special district where a portion of property taxes from that district are set aside to be used for redevelopment initiatives aimed at reducing blight in that district. The tax revenue that funds CRAs is drawn through a mechanism known as tax incremental financing. After a CRA district is established, as property tax values within the district increase, a certain amount of the increased property tax collected is put into the CRA funds.
Escambia County takes 75% of property tax revenue increases for CRAs into its CRA fund while Pensacola takes 95%. Since all of the CRAs in both the city and county are older than the Children's Trust, it means that 75% of the Children's Trust tax levied on county properties in a county CRA district would go to the county instead of the Children's Trust, and 95% in city CRA districts.
Escambia County CRA districts include places like Warrington, Brownsville, Cantonment and Ensley. The city's CRA districts cover most of its downtown and westside areas along with an eastside CRA that includes areas near Interstate 110 and old East Hill.
Escambia County has used its CRA to do things like build sidewalks, upgrade parks and provide home repair assistance.
Pensacola's CRAs cover 31.8% of the city and are able to bring in more revenue than county CRAs because they capture both the county and city property taxes. The city has used its CRA to subsidize downtown redevelopment, build infrastructure as well as major projects like the bonds used to Community Maritime Park and the ongoing construction of Bruce Beach Park.
CRA funds collected from an individual CRA district must be spent in that CRA, and projects funded must comply with a written redevelopment plan for that district approved by the CRA board.
Legal questions remain
The Escambia Children's Trust's official letter requesting to be exempted was signed by Cannon but written by attorney Meridith Bush.
In the letter, Bush pointed out that in the county's redevelopment plans, the only mention of specific programming for children in the county's nine CRAs is in the Cantonment CRA.
The Cantonment Plan calls for increases to voluntary pre-kindergarten and childcare programs, according to Bush.
Previously: Escambia County says Escambia Children's Trust owes $1.1 million in taxes
The letter also pointed out that in fiscal year 2022, Escambia County's CRAs had a fund balance of $7.3 million, which increased by $1.5 million from the previous year. The CRA's expenses were $2.6 million, while its revenues were $4.3 million.
"The CRA has sufficient funding from other sources which could be used in lieu of the Trust's tax increment," Bush wrote.
Bush further added that Children's Trust has pledged $1.6 million to programs based inside Escambia County CRAs.
Atwood District
$226,390 on YMCA – Ferry Pass Elementary School out of school program
$6,314 on Salt Ministry – N. Palafox Health Department out of school program Palafox site
Barranca District
No programs
Brownsville District
$226,390 on YMCA – Global Learning Academy out of school program
Cantonment District
No programs
Englewood District
$221,450 on Epps Christian Center out of school program
$555,590 on New World Believers – HOOPS mental health services
$249,906 on Children's Home Society – Weis Elementary School out of school program
$51,429 on Boys and Girls Club – Englewood Club out of school program and mental health services
Ensley District
$6,314 on Salt Ministry – N. Palafox Health Department out of school program Palafox site
Oakfield District
No programs
Palafox District
$93,981 on Youth Left Behind – Silurian Pond Apartments mental health support
$51,429 on Boys and Girls Club – Montclair Club out of school program and mental health services
Warrington
No programs
Bush's letter also raised the specter of a legal dispute if the money collected by the county isn't spent on children's services in a way that complies with the law creating the Children's Trust, citing a previous First District Court of Appeal ruling that involved a 1982 dispute between the city of Gainesville and the St. Johns River Water Management District.
"Florida law has long established that a special taxing district may not be created with general taxing authority and may be empowered to levy only those taxes bearing a substantial relation to the special purpose of the taxing district," Bush wrote.
During the board meeting Wednesday, White, who is an attorney, also echoed Bush's position.
"If they're going to take this money, they have to show us how they're going to use this money for children," White said. "So, I don't know what their purpose behind taking this money is, but I would just encourage us all to read this (Bush's letter) and just be prepared if they do take the money to make sure that they use it for a project based for children because, as taxpayers, we specifically said you can take our taxes if it's a program for children's services."
This article originally appeared on Pensacola News Journal: Escambia Children's Trust CRA tax may go to Pensacola, Escambia County
