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Florida cities wary of bill that would cap transfers from municipal utilities to general revenue

Supporters say residents who are customers of municipal utilities but live outside city boundaries are being taxed without representation.

Florida’s city- and county-run utilities could be limited in the amount of money they can transfer under a bill moving in the Legislature. The measure would cap transfers from a city’s utility to its general fund.

Backers of House Bill 1331 say they’re concerned about residents who are customers of municipal utilities but live outside city boundaries.

Those customers can be forced to pay surcharges but can’t vote for municipal officials — which some lawmakers likened to “taxation without representation.”

Under the bill, the greater the proportion of customers outside the city boundaries that a municipal utility serves, the less money they could transfer to the general revenue fund.

Tallahassee Mayor John Dailey says that would be a significant threat to his city’s budget.

“This $10 million hit represents one-third of my entire sworn police department,” Dailey said. “So in order to maintain quality of life and be able to pay one-third of our officers, which would be the equivalent, we would significantly have to raise the millage rate in the city of Tallahassee.”

The bill would limit the rate of transfer not only for municipal electric utilities, but also for natural gas and water or wastewater utilities.