U.S. Rep. Joe Garcia wants to start a national discussion about the issue of exempting privately owned military housing in Key West and elsewhere from local property taxes.
Friday afternoon, Garcia, a Miami Democrat who represents the Keys, said an amendment he proposed for the National Defense Authorization Act of 2013, which passed the House Thursday in a 315-108 vote, would highlight the issue by requiring a detailed tracking report from around the country.
His Key West field director, Jennifer George-Nichol, said the amendment requires the secretary of defense to detail "any project across the country in which the owner of that project has outstanding local tax obligation. In Key West, Balfour Beatty is the perfect example."
Garcia's action follows Wednesday's veto by Gov. Rick Scott of a state bill that would have made privately owned military housing in Florida exempt from local taxes except for units not actually occupied by military members. That means the issue will play out in a November trial pitting Balfour Beatty and its parent, Southeast Housing LLC, against Monroe County Property Appraiser Scott Russell.
In 2007, the U.S. Navy transferred 895 houses designated for the military in Key West to the privately held Southeast. The transfer came with the tax exemption.
In 2011, then-Property Appraiser Karl Borglum reversed the exemption and filed an $11.5 million lien seeking back taxes, penalties and interest for the military housing spread across Sigsbee Park, Trumbo Annex, Truman Annex, Peary Court and the Branch Medical Clinic on South Roosevelt Boulevard. Southeast Housing sued.
In a prepared statement, Garcia, who sides with Russell, said "one company in Monroe County ... has failed to pay over $11 million in local property taxes. That is not right -- everyone should pay their fair share to fund our local schools, law enforcement and other important public services."
On the state side, the notoriously anti-tax Scott wrote in his veto letter that "a floor amendment may have had the unintended consequence of imposing property taxes on portions of housing developments on federal military installations that are currently fully exempt from such taxation."
That apparently refers to the civilian units.
State Rep. Holly Raschein (R-Key Largo), who championed the law, said on US1 Radio Thursday morning that "it's his job to bolster military installations and send a message to D.C. that we are willing to support our military families. We want to keep our bases in Florida and I'm sure that's part of the governor's reasoning."
Russell's Sarasota-based attorney, John Dent, said of the veto letter: "Who knows what's on the mind of the governor," calling the veto message "perplexing."
"It may be that Balfour Beatty and Southeast people wanted to kill it," he speculated. "They may be hoping that either through the litigation and through continued lobbying ... they'd make a further attempt to get rid of their liability," the tax liens. "I can't guess."
A representative for Southeast's local counsel, David Paul Horan, said he had been "instructed" not to comment.
In March, Key West City Commissioner Jimmy Weekley sponsored a local resolution, which passed 6-1, opposing the legislation.
"The governor has finally done something I support," he said. "Now it's up to the courts. To me, if it's no longer owned by the military and a private company is using it to make money, they should pay taxes."