What is an ordinance and why do local governments need so many?
An ordinance is a legislative order enacted by a municipal government to regulate for the protection of the public health, safety, morals, and welfare; to license; to tax; and to incur debt. In other words, municipal governments enact ordinances to serve the best interests of the public and municipality.
How are ordinances enacted?
- Enacting an ordinance is a multi-step process that involves elected officials, a municipality’s attorney, and the public.
- Local governments must post advance notice of all meetings and meeting agendas listing items of business being considered, including ordinances.
- The public has multiple opportunities to be heard at the meetings and to provide input – positive or negative – so any party believing an ordinance would negatively impact them has multiple opportunities to raise the concern for local elected officials to consider.
- But SB 620/HB569 and SB280/HB403 give businesses the opportunity to skip the process everyone else must follow and allows them to act after the fact.
- In addition to allowing businesses this special treatment, the proposed legislation allows the businesses to seek monetary compensation from the municipality.
- That compensation would lead to ad valorem tax increases since the legislature would not make state money available to the local governments.
- But it’s not just compensation that would lead to increased taxes – Legal fees from a municipality defending itself against claims made by businesses, even if a court’s finding favored the municipality because the bills are written to award legal fees and costs for the business if they win but not for the municipality if it prevails, would lead to increased taxes. So would the cost shouldered by a municipality to perform a business impact statement to accompany all ordinances.
And none of the costs can be budgeted, since it’s impossible to predict how many ordinances would be considered each year or how many businesses would challenge an ordinance.
Added costs leading to increased ad valorem taxes isn’t the only way a municipality would suffer. The need to take these costly extra measures to enact ordinances could have a “chilling” effect on some municipalities where added costs and increased taxes are not realistic or possible so instead local elected officials would not enact ordinances, which would negatively impact the municipality’s residents, businesses, and visitors.