Undemocratic Towns and Doughnut Holes

Governing announced the winner of our state and local government journalism award, the Hal Hovey award, last month.
by | March 2, 2010

Governing announced the winner of our state and local government journalism award, the Hal Hovey award, last month. As usual, we received a bunch of good applicants, so I wanted to highlight a couple of the entries that didn't win.

One was a fascinating series in the Naples Daily News about Ave Maria, a town in Florida where democracy doesn't exist and, unless rules are changed, will never exist. That sounds too amazing to be true, but it was the provocative thesis of the series by reporter Liam Dillon. Here's the thrust of the story:

What [citizen Kathy] Delaney didn't know is that Ave Maria's founders already haddecided how the town northeast of Naples would be ruled. They wouldhave the power to control the town forever. This power, some say, is sogreat, it might be unconstitutional.

The founders, former Domino's Pizza magnate Tom Monaghan and locallandowner and county namesake Barron Collier Cos., wrote and lobbiedfor a state law that established Ave Maria's government. In June 2004,it became law over Ave Maria, the 11,000 acres of former farm fieldsthat center on a university in the Catholic tradition.

...

The law gives Monaghan and Barron Collier Cos. more power than anyFlorida developer in at least 24 years, power perhaps not seen sincethe days of the early 20th century land boom. The law makes landowners,not registered voters, the ultimate authority in Ave Maria. The lawensures Monaghan and Barron Collier Cos., as the largest landowners,can control Ave Maria's government forever.

How is this possible? Ave Maria isn't a city or a town under the law, but rather a new form of special-purpose government that is somewhere between a general-purpose government and a homeowners association. Not everyone agrees that Dillon got the story right, but, regardless, the series raised really interesting questions I hadn't previously considered about the power of special districts and whether they should have to conform to democratic norms.

The Sacramento Bee also produced very good series (here, here and here) looking at the origins of California's fiscal problems. The tale involves a rich history of poor financial decisions. I especially liked this part:

But even extending the sales tax to currently untaxed goods has proved to be an iffy proposition. In 1991, lawmakers desperate for revenues extended the sales tax to snack foods, bottled water, and newspapers and magazines.

Defining exactly what constituted a snack food, however, became a daunting task for tax officials. Tortilla chips, peanuts, granola and whole apple pies, the state Board of Equalization decided, were not taxable. Doritos, pretzels, granola bars and slices of apple pie were taxable.

"Doughnuts aren't taxable, but doughnut holes are," fumed Assemblyman Mickey Conroy, R-Orange. "I think it's a disgrace."

So did voters. The following year, they decisively repealed the "snack tax."

California's doughnut hole tax is my new favorite anecdote about the absurdities of state tax policy -- I've probably told it to three or four people already. Yes, when you're a reporter at Governing, you need a stockpile of anecdotes about the absurdities of state tax policy. What else would we talk about?

Josh Goodman
Josh Goodman  |  Former Staff Writer
mailbox@governing.com

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