DELTONA, Fla. — A local government official in Volusia County is proposing the elimination of the municipal/utility tax and franchise fee from residents’ electricity bills.
Deltona Mayor Santiago Avila Jr. announced on Facebook Monday morning that after receiving complaints from residents, he asked the interim city manager to add a discussion about removing the fees to the agenda for Monday's City Commission meeting.
During the meeting, the city manager asked for a consensus from the commission to hold a workshop to further discuss franchise fees in January or February. While they agreed, they did not set a date for that workshop yet.
Ahead of the meeting, Spectrum News asked Avila how much money the city would lose by removing the fees, what impact the loss of funds might have on the city budget and how the city might make up for the missing funds in other areas.
Avila said he did not determine the exact amounts involved before making his announcement on Facebook.
“That’s what we are going to talk about (at the City Commission meeting), right?" he said. "I want to know what that money is being used for. What's going to happen if it does get removed? If we can at least talk about getting it reduced.
Avila said he has heard concerns about additional charges on electricity bills from FPL and Duke Energy customers.
"The point is, is that I've had several residents approached me," he said. "There's a resident, I guess they have Duke Energy, they're paying just in those two fees over $70. That's unacceptable.”
Deltona resident Nick Lulli, who has lived in the city for more than two years says it's been a trying time, and the high fees have only added insult to injury for many people.
Lulli said that during the past couple of years, he has felt the impact of his increasing FPL electric bills.
“It's $265 for electrical service — the rest of that is taxes and fees,” he said, pointing to a franchise fee of $16.29, and local utility tax of $23.75 on his most recent bill.
“I’m like, 'Wow, $40 of this bill is literally tax money that goes to the city of Deltona,'" Lulli said. "So, it's not even really going for the electrical usage or anything like that. It literally is just a tax on top of the other taxes and fees that are already on it."
He is not the only city resident who has noticed how much local fees and taxes add to their electric bill.
“When you're already looking at a $400 bill and then they tack on taxes that can be anywhere around $50, $60, because it appears to me it's a sliding scale," said Duke Energy customer Dori Howington. "And I’m not sure how it works... But it just, it seems like a lot."
According to her Duke Energy bill, she paid more than $30 in municipal franchise fees and local utility tax combined.
A franchise fee is an amount paid to municipalities in exchange for the government not creating an electric utility of its own that would compete with an existing one. While a municipal utility tax is paid to a municipality based on a customer's electricity usage.
“When I saw the proposition this morning, I thought, 'Wow, OK, here is an opportunity for us to move that bill in a different direction,'” Lulli said.
Howington says any help in cutting local taxes on electric bills would make a big difference for hundreds of families.
“Electricity is a requirement of life — it's a necessity," she said. "We have to have it, and, so, anywhere we can reduce the strain on residents is a good thing, in my opinion.”
Lulli said he would save more than $400 a year if the local fees were eliminated.
“That would certainly make me feel a lot better going into 2024, knowing that I’d be a little bit more financially secure," he said.
For Howington, eliminating these local taxes on her bill would mean more would go toward other expenses like groceries.
“When you factor in our high summer bills, it comes out closer to about $600 a year," she said. "So, with that, I mean, that's almost one week of groceries or snacks for my kids."