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Taxing questions on sea-level rise

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Sunset Cove in Key Largo

Sunset Cove in Key Largo

Taxing questions on sea-level rise

Tax Section studies its effect on local government revenues

Senior Editor

The mating habits of penguins in Antarctica and the amount of snow and ice in the Himalayas might seem like an odd impetus for The Florida Bar’s Tax Section, but those are some of the reasons the section is launching a study of sea-level rise and what it means for tax revenues for local governments.

Section Chair William Lane, at a recent Bar Board of Governors meeting, said that the section, with help from law schools, plans to look at how sea-level rise caused by global warming will affect tax revenues of local governments and in turn their ability to deal with the effects of that sea-level rise.

The genesis of that effort began decades ago, according to Lane, when he got his first job out of law school working for the law firm of Richard Jacobs, a former section chair. The two have stayed in touch over the years, and, as Jacobs wound down his career and stepped up his traveling — or trekking, as he calls it — he began to see the effects of climate change.

“If you get dirty hands and wet feet from trekking, if you get out and see what’s going on, you cannot deny it,” Jacobs said.

He has visited all seven continents in his travels, and the evidence is everywhere.

Scientists in Antarctica talked about different species of penguins. Those that breed on rocks are increasing. Those that breed on ice are either declining or moving further inland where scientists can’t see them, Jacobs said. In the Himalayas, ice and snow are melting. Mackerel, which like colder waters, have migrated north from Scotland to Iceland, which has denied permission for Scottish fishermen to pursue them in its home waters.

Closer to home, Jacobs was visiting a nature preserve near Crystal River and saw dead cedar trees. He asked a preserve official and was told that just the existing sea-level rise of a few inches was enough for salt water to get into the trees’ roots and kill them.

“When I started all this trekking stuff, I never had climate change on my mind,” said Jacobs, who made his first such trip to Africa in 1982. “Once you see things, then your mind changes.”

When Lane became chair of the Tax Section, Jacobs saw an opportunity and took his concerns to him. That resulted in a presentation to the section’s Executive Council and a decision to launch the study project, which Lane and Jacobs said could take two to four years.

“We’re going to be reaching out to our liaisons with all of the law schools in the state, inviting both the faculty as well as the students to research and write on recommendations on possible adjustments to Florida’s state and local tax policy as the result of the impact of sea-level rise,” Lane said.

In a 2016 paper presented to a conference at the University of South Florida, Jacobs pointed out some of the challenges cities and counties will face. Since the mid-’70s, Florida has abolished the intangible tax on investments and cut rates for estate taxes. There are lower taxes on businesses, and the law allowing limited liability companies, which are not subject to income tax, did not exist 40 years ago.

The result is Florida is heavily reliant on property taxes and sales taxes — and those are most vulnerable to sea-level rise. Flooded coastal property will obviously lose value, and businesses that have to move or are subject to flooding will collect less sales taxes.

Lane noted that governments will still be required to provide services to threatened properties as long as their owners continue to reside or otherwise use them, even as tax revenues from those properties decline.

“Florida’s tax system won’t take care of the problem, and it needs to be changed, and that’s an extremely controversial issue,” Jacobs said. “All the studies show that 80 percent of Floridians live in a coastal community. Once those communities can no longer support those people and start to have problems, the revenue stream has got to reduce, and that’s just the time you need more revenues to keep up with the maintenance of your coastal communities.”

As an example, he cited Miami Beach, which has just committed $400 million to combatting sea-level rise, including raising its streets that now regularly flood at extra high tides.

Any solutions will require careful research, and that’s why the law schools are invited to participate. Jacobs is putting up $500 for the best written article from the schools, and he hopes the section will match that amount.

There’s another reason for involving law students in the project, he said.

“It’s going to be their generation that has to solve this problem, and they need to start addressing it now,” Jacobs said. “The whole system in Florida is based on growth. Our revenues come from growth. That involves putting more people on the beach and pumping more water. This whole thing has to be rethought, and we hope we can kick off a reconsideration.. . . We have no solution to a problem that’s already started. It’s not a problem that’s purely theoretical; it’s a problem that’s already started, and it’s only going to get worse.”

He noted one study projects sea-level rise at 2 feet by 2048 and 6 feet by 2100 in parts of Florida. Lane added that he recently heard a report on National Public Radio that the last time the atmosphere contained as much carbon dioxide — a prime driver of climate change — as it does now, sea levels were 9 meters, or about 30 feet, above where they are now.

Jacobs and Lane said they expect the section’s study to take two to four years and after that, more time for legislative action at the state and federal levels. “Certainly at the federal level and certainly at the state level, a lot of comprehensive legislation to address a problem takes a half a decade to a decade to go from study to actual legislation,” Lane said.

If you want to know how sea-level rise will affect your area, Jacobs provided this link, which allows you to type in your ZIP code and get information about what rising seas will bring to your area: Click on the “Map & Tools” link. A report on Florida and rising sea levels can be found at

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