What Are Special Tax Districts in Florida?
Explore the structure of Florida's special districts, a layer of local government that finances community services through assessments on your property tax bill.
A special district is a unit of local government established to fulfill a specific function within a defined geographic area. They provide services or infrastructure, such as managing water resources or providing streetlights, that a city or county government may be unable or unwilling to offer. By focusing on a single purpose, these districts can offer a more specialized level of service. They are considered special-purpose governments because their authority is strictly limited to the services outlined in their founding documents, unlike general-purpose governments like cities and counties that have broader powers.
Types of Special Districts in Florida
Special districts in Florida are categorized as either independent or dependent. An independent special district has a governing board separate from any single county or municipal government. A district is dependent if its board members are appointed by or are the same as the officials of a single local government, or if its budget requires that government’s approval.
Districts are also defined by their function. Community Development Districts (CDDs) are established to build and maintain public infrastructure for new developments, such as roads, water systems, and recreational facilities. The costs for this infrastructure are paid by the property owners within the development.
Other common districts include:
- Municipal Service Benefit Units (MSBUs), which provide municipal services like road paving in unincorporated areas.
- Fire control and rescue districts, which deliver emergency services.
- Water management districts, which oversee regional water resources, including flood control and water supply.
- Health care districts, which may operate public hospitals or provide community health services.
The Creation and Governance Process
The formation of a special district in Florida follows legal pathways dictated by whether it is independent or dependent. A dependent district is created by a local ordinance passed by a single county or municipal government. The creation of an independent district is more complex, sometimes requiring a special act of the Florida Legislature or a petition and referendum process involving the area’s landowners or residents.
The governance of a special district is managed by a governing board responsible for its operations and finances. The method for selecting board members is a defining characteristic of the district. For many districts, board members are appointed by a government body, such as a county commission or the Governor.
In other cases, board members are elected by the public. For Community Development Districts, the governance structure is designed to evolve. Initially, the board is elected by landowners, which means the developer controls the board during the construction phase. As the community is built out and lots are sold, control of the board transitions to the residents, who then elect the members in general elections.
Funding Mechanisms and Tax Implications
Special districts are funded by the property owners who directly benefit from the services provided. One funding source is ad valorem taxes, which are based on the assessed value of a property. This method is similar to how cities and counties levy property taxes, where the district sets a millage rate that is applied to the property’s taxable value.
A more common funding tool is the non-ad valorem assessment. Unlike taxes based on property value, these are flat-rate fees charged to properties for a specific benefit, such as road maintenance or fire protection. These assessments are calculated based on the cost of providing the service, and every property within the district that receives the benefit pays a predetermined amount.
Many districts, especially CDDs, issue tax-exempt bonds to finance the upfront costs of major infrastructure projects. These bonds are repaid over many years, typically 20 to 30, through annual assessments on properties within the district. This debt service assessment and a separate operations and maintenance assessment are collected on the annual property tax bill in the non-ad valorem section.
Locating Information on a Specific District
The primary resource for state-level information is the Florida Department of Commerce, which maintains the Special District Information Program (SDIP). This program hosts an official list of all special districts, providing a centralized database for residents.
For details on how a district impacts a specific property, the local county property appraiser’s website is the best source. These websites feature a searchable property database where entering an address will show all taxing authorities for that parcel. The property record will detail any special districts and provide a breakdown of the ad valorem and non-ad valorem assessments.
Every special district is also required to maintain its own public records and an official website. On a district’s website, one can find its annual budget, financial audits, meeting schedules, and contact information for the district’s governing board members and its registered agent.