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March 15, 2013
Clerks: Give us back our filing-fee revenues

By Jan Pudlow
Senior Editor

County court clerks have received emails saying if they have any cash on hand to send it to the trust fund administered in Tallahassee A.S.A.P., because there isn’t enough money to make payroll.

“It’s a very difficult way to run a business like the clerk’s office, and it’s not unusual,” Sarasota Clerk of Court Karen Rushing told the Senate Criminal and Civil Justice Appropriations Subcommittee on February 20.

Karen Rushing She pitched a new way to fund the clerks — through statutory changes recommended by the Florida Court Clerks & Comptrollers Association — that she said would bring “sustainability and stability” in clerks’ offices across the state, while still allowing the Legislature to maintain authority over the clerks’ budgets.

That new way, in essence, reclaims the old way that emphasized the clerks’ revenue-raising efforts.

The clerks want the first $80 of the civil filing fee for trial and appellate proceedings to go to the Clerks of the Court Trust Fund, instead of being deposited in the General Revenue Fund for all state expenditures.

The second proposed change would relieve the clerks of the obligation of paying an 8 percent service charge that had not been imposed before 2009.

Any extra dollars that may pile up from this redirection of revenue would revert to the General Revenue Fund, the clerks propose.

As it stands now, the clerks are in a bind because of declining revenues collected, as a result of the recession and what the clerks are calling a “foreclosure stalemate,” caused by robo-signing and other paperwork problems in the chaotic foreclosure industry.

The Legislature has had to “backfill” the clerks’ budgets with midyear emergency dollars that have averaged $37 million a year since 2009 — the gap between the legislative appropriation and the revenue actually coming in, Rushing explained.

That scramble to make ends meet has affected service to the public, Rushing said.

“Floridians have experienced longer lines and transaction times, dysfunctional access to public court and county records, and backlogs of court filings when they visit their local court clerks and comptrollers offices,” Rushing wrote in an op-ed piece published in Florida’s newspapers February 24.

“And, while Florida’s clerks have made every effort to ensure access and efficiency, it has become a crucial issue that must be addressed once and for all.”

Traditionally, for more than 150 years, the clerks were funded by fines, fees, and service charges they collected. All of that changed with Revision 7 to Article V.

In 2004, the clerks’ base budget was required to be initially founded on the previous year’s revenue and adjusted each year based upon revenues collected by the clerk.

Clerks’ revenues skyrocketed in the aftermath of the housing boom and subsequent foreclosure-filing frenzy and resulted in an “unrealistic increase” in the clerks’ budget, peaking at $539 million in 2007-08.

In 2009, the Legislature responded by eliminating the revenue-based budget for clerks and instead put the clerks in the state’s General Appropriations Act at a fixed amount — 17 percent lower than the clerks’ previous year’s budget, and diverted some revenues that used to fund the clerks for other state purposes.

“In the Legislature’s attempt to prevent this in the future, it created a funding scheme for the clerks that failed to recognize a stabilized funding source to support clerks’ operations and has resulted in the need for supplemental appropriations each year, additional legislative workload, and instability of the clerks’ services to individuals and businesses,” the clerks argue in their proposed budget process changes report.

Now, Rushing explained, the clerks are asking legislators “to switch to a continuing appropriation budget that would cap the clerks’ budgets at a continuing level set by the Legislature and allow for a possible limited adjustment factor based on increases in workload.”

Going forward for 2013-14, Rushing presented pie charts to senators that show expenditures of up to $456 million and recurring revenues of up to $468.4 million.

“I know that the large counties take care of their issues and have funding mechanisms that move a lot more dollars than small counties do. Have you addressed, as a clerks association, the fairness and parity of funding between the small county clerks’ offices and those that are in the top four or five large counties?” Sen. Charlie Dean, R-Inverness, asked.

Rushing answered: “I have participated in those deliberations [with the Florida Clerks of Court Operations Corporation] and I have personally heard recognition that there are special needs in the small counties, and the larger counties have made accommodations to identify funds for them, when they have been in a position when they were desperate for dollars to make their payroll. So I think there is recognition that there are differences and they need to be addressed as a system.”

Dean: “And that is in this budget?”

Rushing: “Yes, sir.”

Sen. Darren Soto, D-Kissimmee, asked about using additional funding from Florida’s $300 million portion of a national foreclosure settlement reached with Wells Fargo, JP Morgan Chase, Bank of America, Citi, and Ally/GMAC, after allegations surfaced that fraudulent documents were used to foreclose on homeowners.

“Is it feasible at all to use some of that money, at least in the short term, to bridge some of these gaps?” Soto asked.

“Well, I think if we dedicated a particular revenue source for a specific activity, like foreclosures, we would be accounting for it in that manner and not using it elsewhere,” Rushing answered. “Now, there are cash flow issues every day, but the accounting component of it would make sure money wasn’t used inappropriately.”

“How much of the $468 million budget does go to foreclosures?” Soto asked.

“On this particular graph that we show you, it’s a $2 million foreclosure initiative. I understand the court is working on a proposal for resources, and I haven’t had a chance to work with the court on the details. But we will get together and make sure that we have adequate support to provide the court so that they can achieve what they intend to with this infusion of additional resources,” Rushing said.

[Revised: 01-13-2014]