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Bait & Switch Tallahassee Style
So how do these pious legislators respond when an agency takes them at their word and actually becomes more efficient and saves the taxpayers money? Somehow, the legislators' memory dims when it comes time to pay up, and the promise made in the law becomes as worthless as an election slogan.
That's what the Department of Revenue, Florida's tax collection agency, has found out, and the agency's employees have been left with the distinct impression that they've been conned by a bunch of bait-and-switch artists.
Back in the late 1980s, DOR had a reputation as one of the state's worst run agencies. Facing grand jury probes and other investigations, DOR's lack of probity raised serious questions about the fiscal integrity of the entire state government. In 1990, when the executive director resigned under a cloud, Lawrence H. Fuchs, then a deputy controller, was asked to review management procedures, put the agency back on track and turn it over to a new director. When that director, Tom Herndon, resigned in 1992 to become Gov. Chiles' chief of staff, reformer Fuchs took over as director.
Since 1993, general tax administration collections are up sharply by 16.8% and expenditures only 4.3%. How has he done it? By combining current management techniques, such as Total Quality Management, with hard-nosed tax collecting With 5,100 employees, DOR collects on average $79 million a day in tax payments, and occasionally as much as $700 million in a single day. Under Fuchs, speed in collection has meant more money in state coffers. In the old days, checks from taxpayers would take four days to clear the bank. Today, 70% of agency funds come in electronically, which has cut the time to 4/10ths of a day, according to Fuchs, who figures that generates an added $10 million to $12 million in interest payments coming to the state annually.
While in the past political sensibilities played a role in tax collecting, all deadbeats are equal under Fuchs. For example, some local chambers of commerce didn't pay taxes on money raised from seminars and the like. DOR now collects this tax and charges chambers interest for unpaid back taxes as well. Recently, DOR set telecommunications lobbyists in a frenzy by applying the gross receipts and sales taxes to charges for Internet access. As Florida Trend law editor John McKinnon notes: "Nowadays, it's not uncommon every month or so to see an appeals court decision on some new stricter interpretation of the tax laws that DOR is using."
Taxes aren't popular anywhere, of course, but in Florida they are even less so because legislators and others have helped publicize the state as a kind of tax haven, even as it falls further and further behind in paying for its phenomenal population growth. Fuchs has gained the grudging respect of the business people because they know he's right when he argues that inevitably Florida will have to come up with a simple and stable tax structure. "There is no such thing as a free lunch," he says. "Florida is the fourth largest state but ranks 37th in per capita state taxation and 42nd in the percent of personal income spent on state taxes."
Fuchs has fans far beyond Florida's borders. Washington, D.C.-based Governing magazine (which like Trend is owned by the St. Petersburg Times) honored him as one of its "Public Officials of the Year." The Federation of Tax Administrators gave DOR its 1995 Management and Organizational Initiative Award. Recognition has meant a stream of foreign bureaucrats from Argentina, Lithuania, Russia and beyond visit Tallahassee to study DOR's tax-collecting techniques.
Which brings me back to the Legislature and how it showed its appreciation of DOR, and the message it sent to other bureaucrats who consider emulating DOR efficiency. In 1994, the Legislature passed the Government Performance and Accountability Act, which ostensibly sought to encourage efficiency by providing cash awards to state employees who save money as well as pay cuts for malingerers. It probably was a lousy law, vague and subject to interpretation, but it's on the books nevertheless. Last year, when DOR returned $9 million of its budget to the state treasury, Fuchs thought his employees deserved to be rewarded under the 1994 act. He asked the Legislature to give $100 bonuses to half of DOR's employees, which came to $250,000. The House agreed to the request, but the Senate, in the wee hours of the final day of the session, voted it down.
What profiles in courage! What statesmen! What weasels! The legislators have been showing how efficient they are by riding the backs of the bureaucrats for decades. Most taxpayers don't know it, but Florida government workers haven't had a merit raise since 1988, relying on cost of living increases to reach average salaries of about $21,400 which adjusted for inflation is about $13,600.
The bait-and-switch pulled on DOR is just another example of why the Legislature has become one of the most regressive institutions in this troubled state.
