In
December, the Board of Lee County Commissioners voted to place a one-cent,
local-option sales tax referendum on the March 14 Presidential Primary
Ballot. Here are a few facts about the
proposal.
What is the current sales tax?
6 cents.
How much would it increase?
1 cent.
How is it enacted?
Voters must approve it through a referendum.
How long would it last?
Five years; from January 1, 2001 to December 31, 2005. It
cannot be extended without further voter approval.
How much of the current sales tax
comes back to the county? 10 percent. The rest goes to the State. All 100 percent of the local sales tax would
come back to the county and its cities.
How much of the cost would tourists
and seasonal residents pick up? At least 25 percent
and possibly as high as 33 percent.
How much money would it
generate? $310 million over the five years,
shared as follows: Lee County ($206m),
Cape Coral ($56m), Fort Myers ($27.5m), Bonita Springs ($14m), Fort Myers Beach
and Sanibel ($3.5m each).
What would it pay for?
Capital projects only. In the
county, projects would include youth recreation, juvenile justice, library,
public safety and hurricane evacuation and preparedness facilities, and
constructing and improving roads. A
citizen advisory oversight committee appointed by the BOCC would identify
funding priorities – an arrangement similar to the committee that oversees
spending of Conservation 2020 Tax funds.
How many counties have a local sales
tax? 52 of Florida’s 67 counties.
What is the tax levied on?
The first $5,000 of a retail purchase.
What purchases are exempt?
Necessities such as groceries and medicine are not taxed.
What is the cost difference between
a sales tax and paying for the same amount of projects with a property tax
increase? The average household burden would be about
$1,430, or $286 more a year in sales tax (assuming $28,600 of qualified retail
purchases) for five years. To raise the
same amount of money by bonding property taxes, the average household burden
would be about $2,755, or $184 more a year in property taxes for 15 years (the
term for which bonds would be issued).
However, to determine your own cost (instead of an average) just take 1
percent of your qualified retail purchases during the year. If that is much less than $28,600, you’ll
pay far less than $286 a year.
How does Lee County’s property tax
rate compare to other counties? Lee County has the
12th lowest property tax rate of Florida’s 67 counties.
SALES TAX
QUESTIONS AND ANSWERS
In
December1999, Lee County Commissioners voted to place a local sales tax
referendum on the March 14 Presidential Primary ballot. If approved by voters, the so-called
“local-option” sales tax, or surtax, would increase the sales tax Lee County
residents pay from 6 cents to 7 cents on each dollar.
The sales
tax increase would last for five years and raise about $62 million a year for
the county and cities (or about $310 million over the five years). The proceeds would be used by Lee County and
its cities to construct and improve roads, and build youth recreation, juvenile
justice, library, public safety and hurricane evacuation and preparedness
facilities.
Here’s a
few of the advantages of a sales tax:
·
Everyone
helps pay with a sales tax, including the 1.8 million tourists who visit our
county each year and the 65,000 winter residents. That way, the burden doesn’t fall solely to homeowners.
·
The
sales tax increase would last five years.
A property tax increase typically doesn’t go away.
·
The
money from the local sales tax can only be used for capital projects or
equipment. A citizen advisory oversight
committee, appointed by commissioners, will help the county identify projects
for funding. This type of arrangement
has worked well with the Conservation 2020 tax.
·
With
the sales tax, the county and cities have the ability to raise a substantial
amount of money within a short period of time, allowing the government to pay
for projects as we go. A property tax
increase would require the issuance of bonds over 15 years and paying millions
of dollars in interest. With a property
tax increase, the burden to a household is much worse over a longer period of
time.
Following
are some frequently asked questions about the sales tax.
1) How much money will a 1-cent, five-year
sales tax increase raise? (five year totals in parentheses)
County and Cities (1 cent split, rounded)
Lee County $41 million ($206 m)
Cape Coral 11 million (
56 m)
Fort Myers
6 million ( 28
m)
Bonita Springs 3
million ( 14 m)
Sanibel $700,000 ( 3.5 m)
FM Beach $700,000 ( 3.5 m)
Totals $62
m ($310 m)
2)
I
never heard of a tax that went away.
The voter referendum includes a sunset provision in five
years (Dec. 31, 2005). County commissioners cannot
unilaterally re-enact the increase.
It would have to be voted on again by a voter referendum.
3)
What
is subject to sales tax?
Only the
first $5,000 on any retail purchase. In
addition, necessities such as groceries and medicines are not taxed.
4)
Why
not increase property taxes?
The sales
tax is a more broad-based tax where everyone help pays, including the 1.8 million
tourists and 65,000 seasonal residents that visit the county each year. It is estimated that tourists and seasonal
residents will help pay between a quarter (25%) and a third (33%) of the tax.
In addition, with the sales tax you have the ability to
raise a significant amount of money in a short period of time, meaning we could
pay for these projects as we go. A
property tax increase would require the county to issue bonds over 15 years to
pay for these projects and pay millions of dollars in interest.
5)
What
is the cost difference between the sales tax and property tax?
The average
household burden for the sales tax increase would be about $1,430, or $286 more
a year in sales tax (assuming $28,600 of retail purchases) for five years. To raise the same amount of money by bonding
property taxes, the average household burden would be about $2,755, or $184
more a year in property taxes for 15 years (the term for which bonds would be
issued).
6)
Why
can’t impact fees be used to pay for these projects?
The county
does use impact fees for road projects.
But road impact fees bring in
only $12 million a year, and the county has more than $150 million of
suggested priority road projects. This
means that to fund the same amount of projects over five years using road impact fees you would have to more than double them,
or wait 15 years to do all of the projects.
While the Board of County Commissioners currently is looking at road
impact fees and whether they need to be increased, any increase, other than one
that raises them 157%, wouldn’t make a significant difference in funding
current road priorities.
7)
Why can’t gas taxes be used?
Basically, they’ve all been
committed to existing projects.
When you
buy a gallon of gasoline locally, you pay 48 cents in federal (18 cents), state
(14 cents) and local (16 cents) gas taxes.
The 16
cents charged locally breaks out this way:
4 cents goes to the county (but is first split with the state); 1 cent
goes to the cities; and 11 cents is shared between the county and cities (55%
to the county and 45% to the cities), which includes a 6-cent local-option gas
tax adopted in 1989 and the 5-cent local-option gas tax approved in 1994.
Here’s how
the county’s share of the gas taxes is used:
·
Of the
4 cents the county collects for itself, all is used for Department of
Transportation operations and maintenance of existing roadways.
·
Of the
county’s share of the 6-cent local-option gas tax, 2 cents repays bonds that
were issued long ago to fund such projects as the Daniels, Metro Parkway and
Bonita Beach roads widenings; 2 cents goes to road resurfacing and rebuilding;
and a small portion funds Lee Tran operations.
·
Of the
county’s share of the 5-cent local-option gas tax, half went to fund the
Midpoint Memorial Bridge Corridor (the roads and flyovers leading to the bridge
in Cape Coral and Fort Myers) and half went to non-corridor projects.
Gas tax
money has been used to construct or fund improvements to Corkscrew Road, Lee
Boulevard, Ben Hill Griffin Parkway, the Page Field Connector/Fowler Street
Extension, the Danley Drive Extension and Plantation Road reconstruction.
8)
Why can’t tourist taxes be used?
By law,
Tourist Development Taxes cannot be used to pay for these projects.
9) Why can’t increases in the property tax base
fund the identified projects?
The
increases in the taxable base haven’t been large enough to pay for these
projects. In addition, much of that
money goes to the general fund to pay for government operations.