When lawmakers get quiet, it’s time to start worrying
Every legislative session has its noisy moments — fiery debates, impassioned testimony, high-profile issues like abortion and gambling and anything to do with animals.
But sometimes the quiet times are the ones to watch. The bills with bland titles and vague wording that can be impenetrable even to experienced politicos. The bills nobody seems to care about — except the people who are paid to care.
That’s what happened Tuesday in a House committee room that had just seen an angsty, fundamentally pointless debate over whether professional sports franchises would be required to play the national anthem, another headline-generating sortie in the culture wars that have become a hallmark of this session.
A few bills later, the committee took up HB 977. The legislation governs the sale of tax certificates — liens against land and buildings owned by people who have failed to pay their property taxes. These certificates used to be sold on courthouse steps, but nowadays almost every county conducts its auctions online, with the winning bidders buying certificates and then negotiating with the delinquent property owners to settle the outstanding debt. The bids are based on the interest rate the investors plan to charge property owners — thus, the lower the bid the better.
Would it shock you to learn that this is a billion-dollar business in Florida? If not, then it probably wouldn’t come as much of a surprise that a handful of big players have figured out a way to rig the contest — and want to handcuff the county officials who have taken steps to spoil their fun.
This is how the game is played, as detailed in a story by the Sentinel’s Skyler Swisher and the South Florida Sun Sentinel’s David Lyons. Big investment firms flood the auctions with bids, placed through thousands or even tens of thousands of shell companies, each with its own taxpayer identification number. Those bids can crowd out smaller investors and individuals, securing the bigger companies a massive advantage — if there’s a tie for winner, the lien goes to an individual bid chosen at random. As Walton County Tax Collector Rhonda Skipper described it, it’s like having a lottery where every potential purchaser gets one ticket — except for the 800-pound gorilla investor, who gets 1 million. “Is that fair?” she asked.
Of course it’s not. That’s the point. In 2013, an investigation by the Sun Sentinel exposed the practice, and several tax collectors took steps to shut down the thousand-armed bidders by requiring a deposit from any entity that wanted to place a bid. HB 977 would strip these local elected officials of that power, making it easier for big companies to swoop in and dominate the auctions once again. Once they’ve effectively crushed competition from smaller investors, tax collectors say the interest rates bid by the big companies — or as Orange County Tax Collector Scott Randolph refers to them, the “cartels” — are likely to increase, making it tougher for owners to settle their debts.
That sounds more likely than the scenario proposed by the sponsor of the legislation — who compared the situation to the behavior of Walmart competing against locally owned businesses and offering consumers lower prices. That choice was unfortunate, given the ravaging impact the mega-retailer has had on many downtowns — but falls surprisingly in line with Walmart’s history of price manipulation and anti-competitive behavior.
It won’t surprise you, either, to learn that the big investors (including Gulf Group Holdings, the Aventura-based firm that was spotlighted in the 2013 investigation) have been remarkably generous with their campaign contributions. The money may not flow directly to lawmakers, but Swisher and Lyons documented tens of thousands of dollars’ worth of contributions to committees that then sent cash to committees affiliated with top lawmakers including House Speaker Chris Sprowls and Senate President Wilton Simpson.
Here’s why you should care: Someday, you may be one of those Floridians who hits a rough patch — or just ignores the notices from the tax collector until you realize you’re seriously overdue. Someday, one of these megafirms may scoop up the lien on your home, the biggest investment you’ve ever made. And then they’ll charge you to clear your title, with interest that can go as high as 18 percent.
Do you want that process to be as competitive as it can be? Or do you want it dominated by a handful of big players who know how to extract maximum profit from every dollar?
That’s the kind of question lawmakers aren’t eager to answer, and this is the kind of legislation they aren’t pushing to spotlight. For good reason.