Taxing dilemmas for Manatee County, school district on revenue for critical needs

On Tuesday, both the Manatee County Commission and the Manatee County School Board wrestled with issues of vital importance to the future wellbeing of our community -- future revenue from sales taxes. Voters will determine the outcomes sometime in the future, likely in November should both the county and school district pursue that date.

Commissioners agreed with the recommendation by the Citizens Financial Structure Advisory Board to pursue a half-cent increase in the sales tax but didn't vote on placing the proposal before voters yet. Meanwhile, the school board overrode heated opposition to approve an odd coupling of a half-cent sales extention with an impact fee discount.

On such a hot-button issue as taxation, the debate usually gets muddied by unsubstantiated claims that undermine the facts. The county and school board will have to wage strong campaigns to convince voters to weigh the facts and reject the falsehoods.

County sales tax facts

The advisory board did not take this task lightly, nor did they enter the process with a pre-determined agenda. That suggestion impugns on the integrity of these highly engaged and knowledgeable citizens. Their commitment to community progress is unassailable.

The board held numerous public meetings over the past few months to learn the facts about the county's looming budget shortage and the options for generating new revenue streams. After thoughtful deliberations with the community the paramount concern, the board made its recommendation.

Unlike Sarasota, Pinellas and Hillsborough counties, Manatee County is overly dependent on property tax revenue. Lacking other major income sources, Manatee is left with an unfair system; 30 percent of residential property owners pay 67 percent of the total taxes.

While Manatee's population grew by 50,000 since the beginning of the recession, ad valorem income fell by 18 percent. The general fund can barely cover the costs to maintain the same level of service as last year even while serving thousands of additional residents. Few new programs received funding this year.

Plus, the penny-pinching county administration and commission downsized government during the recession, cutting 300 positions out of the workforce while keeping pay lower than neighboring counties (which itself remains a big issue). Fiscal restraint has been the commission's guiding principle for years, as commission records and history prove.

The immediate reaction from some quarters is commissioners should find the funding in the current budget without raising any tax. The county cannot extract big money out of the budget without damaging services -- services that residents demand.

The county cannot even afford to maintain current assets, including parks. A half-cent sales tax would produce enough revenue to address transportation, public safety and parks/community amenities, all three essential to our wellbeing and economic growth.

The advisory board also recommended this split of the revenue: 65 percent for transportation, 14 percent on public safety, 13 percent on parks and amenities, and 8 percent set aside for contingencies. Voters will know the general outline for tax expenditures.

State law dictates that impact fees on new residential and commercial construction only be spent on infrastructure that serves the new development, including roads, schools, parks, public safety, law enforcement and libraries. Commissioners cannot violate the law and direct impact fee revenue into existing programs.

Should the commission proceed with this sound solution to a revenue shortfall, we recommend voter approval.

School impact fee, sales tax

Also Tuesday, the school board insisted on continuing down a path that could boomerang, should voters reject the coupling of two disparate revenue sources into one referendum issue. The district desperately needs an extension of the current half-cent sales tax, due to sunset in 2017. That tax will generate far more revenue than impact fees while being far more flexible on expenditures.

The board elected to approve a three-year implementation of the impact fees recommended by a consultant, with 50 percent of the total the first year, 75 percent the second and 100 during the third and thereafter. But should voters approve the sales tax extension, the district would only impose the 50 percent level.

That caveat does not benefit the general public, but does help developers and builders who theoretically pass that savings onto new home buyers and business owners. School impact fees (but not the county's) were suspended in 2009 in order to boost home construction during the recession.

The school board and district administrators have to sell this to voters, and the impact fee caveat may be tough to explain. Tuesday's board vote came despite searing criticism from public speakers and other elected officials. Whether that opposition endangers passage of a sales tax extension remains to be seen.

One certainty, though, was articulated by Superintendent Diana Greene: "The school district benefits from impact fees; however, the school district cannot survive without a half-cent sales tax."

We recommend voters not punish schoolchildren and educators by expressing their anger to the board and administration and voting against this ill-conceived measure. This is one bitter pill that should be swallowed.

This story was originally published April 28, 2016 at 12:00 AM with the headline "Taxing dilemmas for Manatee County, school district on revenue for critical needs ."