In staunchly conservative Collier County, Florida, tax increases are rarely popular. But when the increases are to the bed tax (a.k.a. tourist development tax) and the sales tax, the impact is a little easier to digest. This is mainly because, as compared to tax increases on real property, the bed tax and sales tax do not have uniform impact on owners of real property.
- to diversify the county’s economy through adoption of a bed tax increase;
- to address overdue improvements to infrastructure via a 2018 voter referendum that would increase the County’s sales tax by 1%; and,
- to solicit input on potential creation of a stormwater utility.
Bed Tax Increase
In mid-2017, Commissioners unanimously approved an increase in the bed tax from 4 to 5 cents per dollar, effective in September 2017. This tax, which is part of the County’s overall plan for tourism, will be used mainly to finance a sports complex, which has an estimated cost of around $60 million. This increase is expected to bring in around $5.25 million per year in additional tax revenue. In the event that collected taxes exceed debt service for the sports complex (as is expected), the excess can be used to fund museums, renourish beaches, and promote tourism.
Sales Tax Increase
In November 2018, Collier voters will vote on a 1% increase in the local sales tax to fund infrastructure improvements. For example, a $1 item at Dollar Tree that costs $1.06 today with sales tax, would cost $1.07 with sales tax if this measure is approved. The proposed tax increase is to finance overdue infrastructure improvements in the County, many of which were postponed during the financial crisis. The tax increase would not apply to food or medicine, and is limited to the first $5,000 of purchase of a single item (like a car).
Stormwater Utility Creation?
While not technically a “tax,” the County has engaged a consultant (Stantec) to assess the creation of a stormwater utility, hold public workshops, and solicit public input. Workshops were held late in 2017, and details of implementation are not yet complete. If created, it is likely that the utility will be funded by some form of special assessment or fee. The idea has been suggested before, and has been successfully implemented in many other jurisdictions throughout Florida. In Collier County, however, previous efforts to create a stormwater utility have been unsuccessful. This time around, the impact of recent storms and heavy localized flooding make this a real possibility in Collier County.
The bed tax increase has already been adopted, and the County has already begun collecting revenue generated from the increase. The 1% sales tax increase will likely face the County electorate in November 2018. And it remains to be seen whether there will be a new stormwater utility in Collier County, and if so, how it will be funded. Stay tuned for additional updates.