Special Districts in Florida

By: Matt Kelly and Tyler Worthington

Former Speaker of the U.S. House of Representatives Tip O’Neil once said, “all politics is local,” meaning that politicians must appeal to local constituents to succeed. Yet political economy is arguably most opaque and complex at local levels. Local governments have grown as numerous as they are multifaceted. Over the last 50 years, a new local government was created somewhere in the U.S. roughly every 18 hours. Florida claims 410 incorporated municipalities and 67 counties but another 1650 smaller governments exist under the radar of many in the general public and among elected officials.

Special purpose districts are local jurisdictions created by state legislation or local ordinances to serve a narrow purpose within a specified geographic area. Though individually small, Florida’s special purpose districts spent $13.9 billion in 2014 (see Figure 3).

Figure 1:Sheet 3 (1)

Source: Florida Department of Economic Opportunity (see interactive graph here)

While municipalities, counties, and other “general purpose” governments are run by elected public officials, a special purpose district’s administrators are often appointed. Special districts can serve a variety of purposes, from water supply management and library system administration, to utility service provision and fire protection. Special districts do not include county school districts according to Florida’s legal definition.

In Florida, special purpose districts are classified as dependent or independent. “Dependent” special districts must be created by general purpose governments. But if residents feel they are inadequately served by their local government, they can form an independent special district to provide specific functions. The governing bodies of dependent special districts are appointed by, or consist of members of the governing body of the county or city that created them, and their budgets must be approved by them. In contrast, “Independent” special districts can be governed by whomever property owners in the district choose, and are fiscally autonomous. About 62% of Florida’s special districts are independent (see Figure 2). Both dependent and independent special districts must comply with transparency standards set forth in Chapter 189 of the Florida Statutes.

Special districts typically have substantial administrative and fiscal independence, allowing for greater specialization and, in some cases, improved efficiencies. Some economic research finds that increasing the number of special districts lowers the overall cost of services to residents and consumers. However, special districts are sometimes created to simply circumvent debt limits that constrain general purpose governments, and states with higher general purpose government spending tend to have more special districts. For example, in his book “Imperfect Union: Representation and Taxation in Multilevel Governments,” University of Chicago political scientist Christopher Berry criticizes special district governance, contending that “each government has an incentive to overexploit the shared tax base to provide benefits to its special-interest constituency.”

While special districts are partially financed by general revenue from other local governments, most can raise revenue by issuing tax-free bonds, entering into contracts, taxing, and levying special property assessments. However, executives of special districts are often unelected, insulating them from the consequences of unpopular decisions. In short, special purpose districts have many of the same powers as municipal and county governments, but lower standards of fiscal and political accountability. Twenty-eight percent of Florida’s special districts have no elected leadership (see Figure 2).

Figure 2:Dashboard 1

Source: Florida Department of Economic Opportunity (see interactive graph here)

Comparing  special districts across the nation is difficult because state laws governing their responsibilities and purposes vary widely. According to the U.S. Census Bureau, special districts (adhering to a broader definition) have more than tripled between 1952 and 2012, from 12,319 to 37,203. Nationwide, special districts spent over $208 billion in 2013, or 12.3% of total local government expenditures (see Table 1).

Table 1:

Nationwide Local Government Spending

Government Type Spending (in thousands) Percent of Total
Counties $384,835,379 22.8%
Municipalities $542,803,473 32.2%
Townships $51,024,124 3.0%
Special Districts $208,251,052 12.3%
School Districts $499,333,934 29.6%
Total $1,686,247,962 100.0%

Source: United States Census Bureau

The DeVoe Moore Center collects revenue and spending data on special districts according to Florida’s legal definition, available at www.Floridaopengov.org. Special districts have grown precipitously. The number of special districts has more than doubled since 1990, from 728 to 1650. Spending more than doubled between 1994 and 2014, from just under $6 billion to $13.9 billion (see Figure 3). In comparison, counties spent $39 billion in 2014, while municipalities spent $28 billion.

Figure 3:Sheet 1

Source: Florida Department of Financial Services and www.Floridaopengov.org (see interactive graph here)

Given the size and scope of special purpose districts, they generate remarkably little press coverage. While mayors and county commissions are often credited with local accomplishments (or scandals), many government functions are carried out less accountably by special purpose districts. Any efforts to reform local governments will likely be ineffectual if special districts are ignored. If it’s true that “all politics is local,” special purpose districts deserve more attention.

 

 

*Due to a spreadsheet error, this blog post mistakenly reported that total special district spending in 2014 was $14.8 billion when was originally posted May 9, 2016. The correct figure is $13.9 billion. Last updated: June 2, 2016.

About DeVoe Moore Center

The DeVoe L. Moore Center is conducts economic research and policy analysis focused on state and local policy issues and is located in the College of Social Sciences and Public Policy at Florida State University in Tallahassee. As an educational institution the DMC provides professional research experience to undergraduate and master’s students through an extensive program of internships and independent study, preparing them for a future in public policy, economic development, public sector accountability and entrepreneurship.
This entry was posted in Fiscal Policy, Politics, Tax Policy and tagged , , , , , , , , , , . Bookmark the permalink.

2 Responses to Special Districts in Florida

  1. Pingback: Special Districts in Florida — The DeVoe L. Moore Center Blog | Karl Dickey's Blog

  2. Pingback: Special District Spending Priorities and Political Entrepreneurship | The DeVoe L. Moore Center Blog

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s