Sam Ferreri: 'Severe negative fiscal impact' of utilities changes = tax increase

For more than five decades, local governments and utility companies have had a very good arrangement that works well for everyone. When a private utility needs to run such things as transmission or cable lines, the utility enters into an agreement with a local government and this agreement allows the privately-owned infrastructure to be placed along or underneath publicly owned land. The utility gets the customers it needs while local residents gain access to needed services like electricity, phone service or cable television.

Sam Ferreri
Sam Ferreri

But – and this is vital to understand – the private utility may enter into this agreement with a local government even though the local citizens may not even use that utility’s services. A cable service for example does not serve every household in a community even though cable systems run through their county. Additionally, an electric provider for example, may simply need access to run large electric cables across land to reach a distant community. In this case, none of the local citizens use that service.

Why is this important?

Because lawmakers are considering two measures (SB 896 and HB 391) that will severely disrupt this balanced and fair arrangement. These bills will force taxpayers to pay for the relocation of the privately owned infrastructure nearly any time a local government wants to make improvements to meet local community needs. If passed, these bills will dramatically increase the cost of needed government projects to taxpayers. This will not only put the brakes on badly needed storm water flooding projects, for example, but will have a huge impact on local taxes as well. And to make matters worse, it will also have the unintended consequence of harming the very utility companies pushing for this change.


Imagine this bad bill were to become law. The next time a new storm water pond is being built or a new flood control project is being considered, the local government will be strongly discouraged from allowing a utility company the ability to build in the right-of-way or to create a utility easement. The government would be discouraged because if that project, for example, ever needed to be altered taxpayers would end up paying to move the private company’s poles, wires, transformers and other such items.

According to a legislative analysis, the impact on taxpayers would be immense. The exact words they used were, “severe negative fiscal impact.”

And for those who are not familiar with terms used in the legislative process; “severe negative fiscal impact” means TAX INCREASES for the rest of us.

Lawmakers should oppose these measures because they not only upset a fair balance between public need and local government accommodation, if passed they will raise local taxes – severely – while stifling the growth in badly needed utility services.

Few things have worked as well as the current law has – and this one has worked well since Dwight D. Eisenhower was our president. And while a great many things have needed changing since that time, this good law is simply not one of those things.

Sam Ferreri is the Mayor of Greenacres, Florida and is the president of the Florida League of Mayors. He can be reached at [email protected]. Column courtesy of Context Florida.

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