All the money the Department of Citrus has is paid for by the citrus growers. You don't save dollars by eliminating the Department of Citrus.
At an Associated Press meeting Jan. 19, 2011, about the state's upcoming legislative session, Florida Commissioner of Agriculture and Consumer Services Adam Putnam was asked about an idea floated by Gov. Rick Scott to merge two state departments: Citrus and Agriculture. Putnam wasn't sweet on the idea. "All the money the Department of Citrus has is paid for by the citrus growers," Putnam said. "You don't save dollars by eliminating the Department of Citrus." Government departments usually are funded, at least in part, with taxpayer dollars. So we wondered, is that not the case with the Department of Citrus? Is the entire department's budget paid for by the growers? Putnam spokesman Sterling Ivey explained via e-mail on Feb. 1: "Although it's a state agency, the FDOC is unique in that its operations are not funded through the state's general tax revenue fund. Florida's citrus industry pays its own way in the form of an excise tax placed on each box of citrus that moves through commercial channels." The department is well-known in the citrus-growing areas of Central Florida, but less so in other parts of the state. So Ivey sent us some background from the department's website. It was established in 1935 by legislative approval of the Florida Citrus Code. It's not affiliated with the Department of Agriculture and Consumer Services. The 12-member Florida Citrus Commission, appointed by the governor, sets the annual tax rate that growers pay. The department regulates every aspect of the industry, including research, production, fertilizing, maturity standards, harvesting, licensing, transportation, labeling, packing and processing. Ivey also sent us a link to the department's 2010-11 budget. We contacted Comptroller Debra Funkhouser, who has been with the department for 16 years, and she broke down the budget. The total is about $58 million this year. About 85 percent comes from the box tax, 9 percent from the federal government, and the remainder from interest and carryover dollars, she said in an interview Feb. 2. That breakdown does not fluctuate much, and the department has been funded that way for decades, Funkhouser said. Approximately 57 employees work for the department now, and none of its expenses -- including overhead and salaries – are paid from state tax dollars, Funkhouser said. She did confirm that the department has received only $10 million from state general revenues in its 76-year history, a one-time occurrence after crops were devastated by hurricanes in 2004-05. The box tax is assessed to growers, collected by the processors and remitted to the citrus department, she said. The tax for oranges, for example, is currently 25 cents for a 90-pound box. Does that mean the box tax is passed on to customers buying citrus? "I would have to say there is a correlation, just like the cost of farmers' fertilizer, just like the cost of harvesting that fruit. It's not a direct association," she said. An article in the Lakeland Ledger on Jan. 18, 2011, described a meeting about a month earlier between Ken Keck, the citrus department's executive director, and two officials from Scott's budget office. Keck said the officials discussed possible changes that included a merger with the Agriculture Department or another marketing agency, such as tourism, as well as privatization. "Citrus officials argued any proposed Citrus Department reform would not advance Scott's stated agenda of cutting taxes for Florida businesses and residents because none of their taxes go to the department," the Ledger said. "To the extent this is a general-revenue issue, this does zero for the state budget," Keck was quoted in the article. "It's unclear whether the governor is aware of that." The article noted that the department "contributes about $2 million annually to the state's general fund through a service charge levied on every state agency, (Florida Citrus Commissioner Jay) Clark said." We also looked at the "sunset review"-- routinely done of state departments to determine whether they should be retained, modified or abolished. The Senate Committee on Agriculture was the primary sunset review committee for the 2008 review. The sunset review recommended keeping the citrus department as a free-standing department because a merger would make it inefficient at a time when the citrus industry was facing challenges, including recovering from hurricanes. Putnam claimed: "All the money the Department of Citrus has is paid for by the citrus growers. You don't save dollars by eliminating the Department of Citrus." In fact, about 85 percent is paid for by the growers -- of the rest, about 9 percent comes from the federal government. So Putnam is correct that Florida won't save state taxpayer dollars by eliminating the department, but he's missing the context of the additional federal dollars. We rate this statement Mostly True.
['None']