Legislation working its way through the Florida Legislature would substantially limit the ability of public power electric utilities to transfer revenues to cities’ general funds, which will inordinately affect rural, often economically distressed, communities that have a weaker tax base, the Florida Municipal Electric Association said on March 21.
“Municipal utilities have constitutional authority to transfer revenue generated from assets owned and operated by the local government to the general government budget. These dollars are often used to provide residents with critical life and safety services, including police and fire departments,” said Amy Zubaly, Executive Director of FMEA.
At issue are two bills, HB 1331 and SB 1380. The Florida Legislature’s current session began on March 7. Both bills as amended the afternoon of March 21 would take effect July 1, 2024, if signed into law by Florida’s governor.
“Prohibiting or limiting general fund transfers would eliminate a city’s right as the utility owner to earn a reasonable return on the investment in its utility systems, a recognized right of every utility owner and operator, to provide an essential service and promote a higher quality of life in their communities,” Zubaly said.
The bills “will have innumerable unintended consequences for millions of Florida residents and businesses receiving utility services from a municipality. The legislation will undoubtedly raise costs and diminish the quality of life, through reduced services provided or higher taxes, for millions of Floridians already struggling with the burdens of inflation.”
Historically, public power utilities in Florida 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.