All but one county revenue source exceeded total expected for 2021 fiscal year, County Commission learns

No budget gaps foreseen for next several years, staff says

This is the chart showing the budgeted amounts for the revenue sources and the actual amounts collected. Image courtesy Sarasota County

The only revenue source for Sarasota County Government that failed to meet its projected total by the end of the 2021 fiscal year — Sept. 30, 2021 — was the Communications Services Tax, unaudited figures show.

Staff had budgeted $8,885,350, according to a chart prepared for the County Commission for its March 30 budget workshop. However, the county received $606,865 less than that, the chart said.

Kim Radtke, director of the county’s Office of Financial Management, has noted in the past that the increasing number of county residents using cell phones instead of landlines has resulted in lower revenue from the Communications Services Tax.

Conversely, the county’s Tourist Development Tax — or, “bed tax” — revenue well exceeded the budgeted figure, Radtke pointed out. Staff had budgeted $19 million, out of concerns regarding the COVID-19 pandemic. Instead, the chart in the agenda materials put the total at $31,076,839.

Yet, Radtke said, because of ongoing refinements of the Tourist Development Tax collections, that number has grown to more than $34 million.

Sarasota County Tax Collector Barbara Ford-Coates and her staff have explained that they conduct routine audits and other enforcement actions that can lead to month-to-month changes in the numbers.

The 5% Tourist Development Tax is imposed on rentals of accommodations for six months or less time. Because the county collected more than $30 million in a calendar year, the commissioners authorized staff earlier this year to seek state certification that Sarasota is a high-tourism impact county. The Florida Department of Economic Opportunity did so in late February, Radtke noted later during the March 30 budget workshop.

As a result, the commissioners voted 4-1 to conduct an April 26 public hearing on increasing the Tourist Development Tax to a maximum of 6%, beginning on Oct. 1, which would be the start of the 2023 fiscal year.

This graphic provides information about the county’s request for designation as a high tourism impact county. Image courtesy Sarasota County

Commissioner Christian Ziegler was in the minority on the vote. He has stressed in the past that, when he ran for the District 2 seat in 2018, he promised citizens he would not vote for any tax increase.

Among other data in the chart regarding budgeted revenue and actual collections, the county received $5,449,986 more than expected in its penny sales tax income — through what is known as the Surtax III Program, which expires at the end of 2024. (The commissioners voted unanimously on March 29 to adopt formal ordinances regarding two ballot questions on the Nov. 8 General Election ballot, to seek approval for a Surtax IV program to succeed Surtax III.)

Yet another source of revenue that was well above projections was the half-cent sales tax. Staff had budgeted $34,979,000 for the 2021 fiscal year; the county received $4,713,704 more than that.

Additionally, the gas tax revenue was up $338,914, compared to the total staff had budgeted.

Radtke and Deputy County Administrator Steve Botelho, the county’s chief financial management officer, continued to emphasize on March 30 that the figures they were showing the board members had not been audited.

Chair Alan Maio and Commissioner Nancy Detert stressed the fact that no one could have predicted how much Florida would end up benefiting during the height of the pandemic. “We’re just the lucky winner of that particular lottery,” Detert said.

Board members have noted that, except for a few weeks in the spring of 2020 — at the direction of Gov. Ron DeSantis, in an effort to contain the spread of COVID-19 — the county kept its tourist amenities open, including its beaches.

Other facets of the 2021 and 2022 fiscal year budgets

This graphic shows how much property tax revenue the county has collected over the past years. Image courtesy Sarasota County

Among other data, Radtke said that the county has more than $218 million in all of its reserve accounts. Included in that figure, for the end of the 2021 fiscal year, was $53,921,426, which represents 75 days of operating funds in the event of an emergency or natural disaster.

The county’s Budget Stabilization and Economic Uncertainty Fund, which can be used to plug gaps in the county’s General Fund budget, represented 60 days of operations, the applicable chart said. That figure was $43,137,141.

In dealing with the ramifications of the Great Recession, the county commissioners drew from the Economic Uncertainty Fund, which prior board members had built up during the height of the boom period before that national downturn started.

“We used over $10 million of our reserve savings to balance the budget [in the 2010 fiscal year],” Botelho said.

This graphic shows changes in the fund balance for the General Fund. The red bars indicate years when money was transferred from the Economic Uncertainty Reserve Fund to plug gaps. Image courtesy Sarasota County

Chair Maio reminded his colleagues on March 30 that the county lost 42% of its property tax value at the height of the Great Recession. It was not until the 2020 fiscal year that the county finally received almost as much revenue from property taxes that it had collected in the 2008 fiscal year.

The revenue total in FY 2008 was $175.7 million; in the 2020 fiscal year, it was $173.1 million.

“We’re only in 2021 getting back to where we were at the high-water mark,” Maio pointed out.

The unaudited data show the county took in $181.9 million in the 2021 fiscal year. For the 2022 fiscal year, staff anticipates $192.2 million.

Further, Radtke noted that state economists have projected that property tax revenue will rise 9% this year. In August, the state put that number at 4.9%, she added.

For the 2024 fiscal year, the latest state projection is a 6.9% climb in property tax value, a slide said.

This chart shows the recent history in collections and expenditures regarding the General Fund. Image courtesy Sarasota County

Historically, Radtke pointed out, the county receives 3% more revenue than it budgets for the General Fund, which is the account into which property tax revenue is deposited. Further, she said, staff budgets overall spending from that fund to be 6% less than the amount expected to be collected.

Another chart in the materials provided to the commissioners showed that in the 2019 fiscal year, for example, the county collected 104.5% of the revenue it had anticipated. Yet, the county ended up spending 94.9% of the money that had been budgeted for various purposes.

The General Fund is considered to be the most flexible account the county has, because no restrictions exist on how the revenue can be spent — unlike the situation with other funds. The General Fund is the source to which the commissioners look if they need money for an undertaking when the funds cannot be found from any other source.

This is the March 30 outlook regarding the General Fund for upcoming fiscal years. Image courtesy Sarasota County

For the fiscal years of 2023 through 2026, no deficits have been anticipated for the General Fund, another slide showed. No new revenue source is planned, either, County Administrator Jonathan Lewis pointed out.