Manatee County on pace to diversify revenue streams, vital for budget sustainability

Manatee County remains on track to diversify how government pays for services, programs and capital projects in order to steer away from a heavy reliance on property taxes. Continuing to rely on ad valorem revenue is unwise and unfair. Today, 30 percent of Manatee County residential parcel owners pay 67 percent of the total county revenue.

The Citizens Financial Structure Advisory Board, tasked with submitting recommendations to county commissioners by May 1, met again Thursday amid a sense of growing urgency. The county faces a potential deficit in 2018 as the general portion of the budget stabilization reserve fund drains out.

The board discussion proved enlightening on several key points.

A host of revenue alternatives are on the table, including infrastructure sales taxes, franchise fees, general obligation bonds, local business taxes, municipal service benefit units, and taxing units and stormwater fees. The board's top two ideas are the sales tax and the franchise fee.

To put this in some perspective, Manatee County government has not been wasteful. There are some 300 fewer employees than before the Great Recession, and the budget has been slashed to the bone -- even as the population surges. The most recently adopted budget funds the same level of service as the previous year and denied department requests to fund some desired items. The county's 12 departments shared a $2.4 million pot of money with $7.2 million in requests left out.

New revenue streams are vital to improving our quality of life; building and maintaining infrastructure and assets; and providing essential services, including public safety. Today, the county cannot afford to maintain those assets, including parks.

For several years now, the county has dipped into reserves to simply stay afloat and not raise property taxes. Those days are nearing their end.

As county Administrator Ed Hunzeker told the advisory board Thursday, the solution cannot be a temporary patch but should create a sustainable budget process into the future.

The half-cent infrastructure sales taxes is appealing in that visitors would contribute quite a bit of revenue considering Manatee County's strong tourism industry.

Other administrators' views

Earlier this month, county administrators from Charlotte, Leon and Escambia counties addressed the advisory board. Charlotte's Ray Sandrock called the tax the county's "saving grace" and "an opportunity to make a big improvement to your community ..."

Leon's Vincent Long said, "We wouldn't have a capital program without the sales tax." The sales tax requires a referendum, but Long described that as a "relatively easy sell" in his county.

In order to best sell a sales tax hike to Manatee voters -- who desire concrete, clear goals, not vague political promises -- the county should produce and promote a priority list of projects. Hunzeker articulated that approach.

The half-cent sales tax increase here would generate $22.8 million annually with some shared with the municipalities. And it would not put Manatee County at a competitive disadvantage with neighboring counties since none exceed 7 percent, which Manatee would match with voter approval.

Another potential revenue source, franchise fees, would produce an estimated $15 million. All the county's cities charge this fee on various items. The county is looking at charging for the use of the county's rights of way by private utility systems, though an agreement with those companies would be required.

This would certainly be less controversial than the sales tax.

Wisely, the advisory board talked about the need at recommending more than one revenue option. And listing specific budget items for the money, particularly those popular with residents -- parks, public safety, transportation.

Resident buy-in is essential to the implementation of new revenue streams. In this election year, county commissioners should be looking at the long-term sustainability of the budget. This should not be a political hot potato but a community concern.

This story was originally published March 27, 2016 at 12:00 AM with the headline "Manatee County on pace to diversify revenue streams, vital for budget sustainability ."