Property owners paying high price for government’s bait-and-switch in Palm Beach County

Palm Beach County commissioners are grappling with whether more development should be allowed in the county’s Agricultural Reserve. A bit of history shows how the commission’s faulty decisions and broken promises have led the county down a bumpy road.

A 1998 referendum allowed the county to borrow $100 million in bonds to buy land in the Agricultural Reserve “to protect farming.” For this privilege, an owner of a $500,000 home gets to pay an additional $88 a year in taxes.

This was a bad idea from the start because:

  • It was a misuse of taxpayer funds;
  • There was no plan in place for what to do with the purchased property;
  • It was inappropriate to spend tax dollars for farmland that is not required for any defensible public purpose;
  • County government lied to the public about the real reason for purchasing the land;
  • Taxpayers are now paying higher taxes over 20 years to keep a mere 2,000 or so potential homes out of the Ag Reserve;
  • The tax would not “save agriculture” as the County Commission promised it would.

In a $750,000 media blitz paid for with tax dollars, an advocacy campaign by the county promised that a lot of land could be purchased for $100 million. To get the tax passed, the county told voters it could buy land for $3,000 to $15,000 per acre. When county administrators said the county could buy close to 15,000 acres for the $100 million, business leaders expressed concern about the financial soundness of such projections. But those well-founded concerns were brushed aside.

The $100 million tax never had much to do with preserving farmland anyway. It was all about stopping construction in the agricultural areas. The $100 million outlay was dreamed up by no-growthers and extreme environmentalists to stop development — quite an unproductive use of taxpayer money. But according to the no-growth crowd that intimidated the County Commission into taking action, we would all be spared from the unspeakable horrors of growth because the land would be taken off the table, never to hear the evil sound of hammer striking nail.

So, what happened?

By 2006, the county announced it was close to emptying its $100 million piggy bank. But the per-acre purchase costs had grossly exceeded what the county promised when it wooed voters.

When the spending spree was over, the county had not only laid out $100 million, it squandered another $10 million provided by another government agency. The total cost: $109.9 million for 2,531 acres — or $43,421 per acre. The business community knew this would happen, because once the bond issue passed, it was obvious land values in the reserve would skyrocket — accelerating development. Competing with builders cost the county hugely higher prices. Oops! County commissioners, of course, knowing little about economics and finance, were ”astonished” because they had no inkling how the Law of Supply and Demand works.

Fast forward to today. Land values have risen across the county over the years. Some farmers who own their own land in the Ag Reserve want to be able to sell at the best price. That’s the American way. Their reasonable proposal allows more residential and commercial development and – get this – it doesn’t even apply to Ag Reserve land purchased with bond money!

It’s time to loosen building restrictions in the Ag Reserve on land owned by private citizens. It’s their property. They should be able to sell it for a price representing the highest and best use of the land. But the County Commission says no.

It’s hard to trust governments that disregard promises in the hope that no one remembers. Voters deserve the truth about how tax money will be spent. And landowners deserve free-market sale prices, not those set by government decree.

John R. Smith

John R. Smith is chairman of BIZPAC, the Business Political Action Committee of Palm Beach County, and owner of a financial services company. He is a frequent columnist for BizPac Review.
John R. Smith

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