Sea-Level Rise Adaptation Financing at the Local Level in Florida

This white paper addresses multiple existing potential sources of revenue that local governments could use to pay for sea-level rise (SLR) adaptation in Florida. Specifically, analysis is provided for the use of Ad Valorem Taxes, Special Assessments and Municipal Service Benefit Units, Local Option Tourist Development Tax, Stormwater and Drainage Fees, Bonds, and Special Districts as funding mechanisms.

For each financing tool discussed, the paper reviews:

  1. The legal authority
  2. Examples of current uses of the financing tool
  3. Potential legal issues or challenges associated with the tool, and
  4. The pros and cons of each tool.

Ad Valorem Taxes: As they are both taxes, ad valorem taxes and Municipal Services Taxing Units (MSTUs) are treated together in one section. These types of taxes are included as they could be useful for SLR adaptation due to the public purpose of erosion control, beach re-nourishment, etc. However, the paper describes the main weakness of these taxes as that they are “normally quite restricted in their ability to raise much more funding than what municipalities and counties already levy because of millage limitations” as set forth in the Florida Constitution.

Special Assessments and Municipal Service Benefit Units: Municipalities and counties have statutory authority to levy special assessments, and are given substantial latitude when selecting county improvement projects. Since special assessments are not taxes, they are not subject to the same millage limitations - allowing local governments to, in theory, raise large sums of money for adaptation activities. If the property assessed derives a direct benefit from the service provided, and the assessment is fairly appropriated across the properties that are eligible, then MSBUs and special assessments may offer a good opportunity for SLR adaptation funding.

Local Option Tourist Development Tax: This funding mechanism is described for the beach management portions of SLR adaptation - and, depending on the county, this tax could also raise substantial funds. Florida has ensured that counties have a way to increase revenues through tourism taxes, from those non-permanent residents that utilize state resources. The most apparent strength of this funding as the authors explain - is that it naturally aligns with the adaptation actions of beach nourishment and beach erosion control for sea-level rise - since these appear in the statutory language.

Stormwater & Drainage Fees: Florida law requires local governments to establish stormwater management programs as part of their land development regulations. One strength noted for this funding source is that the fees raised by stormwater utilities can be set high, as the bar is “enough to meet the system’s capital requirements, as well as to defray operating expenses.” However, the paper notes that this funding mechanism is simply too limited to be used in comprehensive SLR adaptation strategies.

Bonds: There are many types of bonds that may be issued by a county or municipality such as ad valorem, general obligation, water system/district, sewage system/district, revenue, improvement, and refunding. Bonding is appropriate for use in SLR adaptation projects, as they are designed in the public interest, and there is a broadness of application afforded by these various types of bonds. One of the biggest weaknesses of bonds described is that there may be a referendum required by ad valorem bonds and general obligation bonds pledged with faith and credit.

Special Districts: There are two general types of special districts that are utilized in Florida and discussed separately here - dependent and independent special districts (DSD and ISD). Special districts are considered a useful mechanism for local governments in SLR adaptation as they are to be used for public purposes by “serving a necessary and useful function to provide services to both residents and property.”

Some other financing options that are described briefly as possible sources of revenue for SLR adaptation include: Local Government Infrastructure Surtax, Electric Franchise Fee (or direct revenue from a local-government-owned utility), Communications Services Tax, Small County Surtax, Charter County and Regional Transportation System Surtax.   


Publication Date: October 2015

Authors or Affiliated Users:

  • Thomas Ruppert
  • Alex Stewart

Related Organizations:

  • Houston Endowment


Resource Category:

Resource Types:

  • Policy analysis/recommendations

States Affected:


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