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Citrus Department Proposes Staff, Tax Cuts

May 17, 2016

Florida citrus growers could save more than $11 million in taxes they pay on boxes of oranges and grapefruit under a proposed Department of Citrus budget that would trim jobs to meet the demands of a troubled industry.

The department, which would see its staff shrink from 39 to 23, released a proposed $20.6 million budget Monday for next fiscal year. The proposed spending plan would be 31.9 percent below the current year's $30.3 million operating budget.

The Bartow-based agency, which will put the proposal before the Florida Citrus Commission for a review Wednesday, is looking to slash travel costs by 40.7 percent, salaries and benefits by 36 percent, retail marketing by 72.5 percent and international marketing by 24.4 percent.

As for staffing, any cuts in July --- the Citrus Commission is slated to approve a budget in June --- are expected to come from administration, scientific research and marketing.

"We've had multiple staff meetings where folks know this is what we're going through," Department of Citrus Executive Director Shannon Shepp said.

For growers of the state's signature crop --- who have been backed by Gov. Rick Scott in seeking the agency reductions --- the proposed changes could result in a drop in the tax they pay to fund the department.

The tax would go from 23 cents to 10 cents on each 90-pound box of processed oranges. The tax could go from 19 cents to 10 cents for each box of grapefruit. Some growers had sought reductions to 7 cents a box.

"While we would have liked to have seen the budgeted assessment at the recommended 7 cents per box, we recognize that the DOC (Department of Citrus) was responsive to the growers concerns, and we appreciate their efforts to make difficult choices and people reductions," A. Duda & Sons CEO David Duda said in a statement Monday.

The Oviedo-based A. Duda & Sons is among a number of large and influential growers that in February called for the agency to downsize as the industry struggles to combat the impact of citrus greening, a deadly disease that decreases production.

With the lowered numbers, the taxes collected on processed oranges are projected to drop from $15.6 million for the current year that ends June 30 to $5.6 million in the next fiscal year. Revenue at the agency from grapefruit production could go down from $1.95 million to $836,500.

Another $44,040 could be saved by growers of specialty fruits.

The "box tax" rates won't be set until the agency is able to determine how much money can be carried over from the current season and after the U.S. Department of Citrus releases its first crop estimate for the next harvest season, which comes out in September.

Scott has directed the agency to use revenue from growers before dipping into any state allocation.

For its budget calculations, the state agency is estimating that the orange harvest for the next season will produce enough to fill 58.1 million 90-pound boxes and about 8.8 million similar sized boxes with grapefruit.

During the current season, the state is projected by the U.S. Department of Agriculture to produce 80.1 million boxes of processed oranges and 10.85 boxes of grapefruit, which would be among the lowest totals in decades. The latest seasonal forecast put the industry on pace to be 16 percent lower than the 2014-2015 growing season total of 96.94 million boxes of processed oranges.

Shepp said the projections for the next season are based upon the direction of the harvest the past five years, which in the past two years has become more unpredictable due to citrus greening.