Legislation in Florida that would have substantially limited the ability of public power electric utilities to transfer revenues to cities’ general funds failed to cross the finish line in the recently completed state legislative session, which came to an end on May 5.
The Florida Municipal Electric Association, which opposed the legislation (HB 1331 and SB 1380), previously said that the bills would inordinately affect rural, often economically distressed, communities that have a weaker tax base. In late March, the City Council of Jacksonville, Fla., passed a resolution critical of the legislation. Several other Florida public power cities followed suit, including Leesburg, Newberry, Havana, Green Cove Springs, New Smyrna Beach, and Wauchula.
Historically, public power utilities in Florida and across the United States have, under their constitutional Home Rule Authority, transferred enterprise fund revenue from assets owned and operated by the local government to the general government budget.
The transfer rate varies city by city based on operating expenses, debt service costs, and the desired level of reinvestment in the assets owned. Municipal utilities focus on reinvestment in their communities.
Florida legislators have in recent years unsuccessfully filed legislation aimed at capping or culling the general fund transfers of Florida’s municipally owned utilities. This year’s legislation addressed additional issues such as representation of outside-the-city customers, outside city surcharges, and limits on utility revenue transfers related to all municipal utilities.