Chapter 6 Florida Government Fund Expenses

Question 1

General Concept

The Florida government receives money to fund expenses through:

Answer 1

• Taxes,
• Fees and charges,
• Special assessments, and
• Debt financing

Question 2

Taxes

ad valorem

Answer 2

The State can collect an ad valorem tax on intangible property, such as stocks and the rate cannot exceed 2 mils.

State cannot collect ad valorem taxes on real property, as only local governments can do this

Federal, State, County, and city properties are exempt from ad valorem tax

Question 3

Taxes

Counties, municipalities, school districts, and special districts

Answer 3

Counties, municipalities, school districts, and special districts have exclusive constitutional authority to tax the value of real and tangible personal property

Question 4

Taxes

County Property Appraiser

Answer 4

The County Property Appraiser must assess the value of the property at a “just valuation”

Question 5

Taxes

Double Taxation

Answer 5

“Double Taxation” is not allowed. Therefore, city residents cannot be taxed by the county for the benefit of residents in the unincorporated area. There must be a “real and substantial” benefit provided to the city residents

Question 6

Fees

Answer 6

Governments charge fees for users of government facilities

Question 7

Special Assessments

Answer 7

Used by governments to pay for services, such as fire and rescue, construction, and capital improvements

Question 8

Finance

State and Local governments borrow funds…

Answer 8

• State and Local governments may borrow funds for a public purpose by issuing:
  
  • Revenue or
  • General obligation bonds for purchase

Question 9

Finance

Revenue Bonds

Answer 9

• Revenue bonds: the government pledges that the revenues generated from the project (paid for by the bond money) as a security to the bond purchasers. Bond purchaser may not go after the government to collect money
  
  • State Government: no referendum is required and it must be for capital projects
  • Local Government: no referendum is required and it must be for capital projects

Question 10

Finance

General Obligation Bonds

Answer 10

• General Obligation Bonds: the government pledges it “full faith and credit” or “taxing power” as the security to guarantee the repayment of bonds.
  
  • State Government: referendum is required
  • Local Government: referendum is required if the funds used to pay back the bond holders is collected through ad valorem taxes and the bonds mature more than 12 months after issuance

Question 11

Finance

Private Sector

Answer 11

Limitations on pledging credit (state and local aid) to the private sector

Question 12

Finance

Paramount Public Purpose

Answer 12

Bonds must be for a “paramount public purpose”

Paramount public purpose test: there is a prohibition of any government from becoming a joint owner, stockholder, or giving/lending/using taxing power or credit in order to aid a corporation/association/partnership/person