County’s Tourist Development Council endorses sixth penny of ‘bed tax,’ with County Commission hearing tentatively set for April 26

70% of proceeds would be dedicated to facilities

This chart shows how the revenue from the five pennies of the county’s Tourist Development Tax is allocated. Image courtesy Sarasota County

In early January, the Sarasota County Commission authorized staff to request Florida Department of Revenue certification of the county as one of “high tourism impact,” based on Tourist Development Tax — or “bed tax” — revenue exceeding $600 million in a calendar year.

On March 9, county staff received that certification, Kim Radtke, director of the Office of Financial Management, told members of the county’s Tourist Development Council (TDC) on March 10.

Therefore, Radtke was seeking the TDC’s recommendation that the County Commission amend its Tourist Development Plan ordinance to provide for a sixth penny of the bed tax to be levied starting on Oct. 1, which would be the beginning of the 2023 fiscal year.

The tax is charged on rentals of accommodations for six months or less time.

If the change does not go into effect this October, Radtke explained, staff would have to hope — “Fingers crossed,” as she put it — that the revenue for 2022 also would meet the threshold, so the county could try again. Then the levy would start in the 2024 fiscal year.

Asked how much the county potentially could lose if it had to wait another year to impose the sixth penny, Radtke replied that staff has projected the increase in the bed tax would bring in about $5.2 million in the first year of collections.

With the TDC members’ unanimous agreement to make the recommendation to the commission, Radtke said that staff would seek commission authorization on March 30 to advertise an April 26 public hearing on amending the Tourist Development Plan ordinance.

Radtke also stressed to the TDC members, “We are not suggesting to change any of the current allocations” of the revenue from the tax. She showed them a slide with the breakdown of the funding.

Instead, she continued, staff has proposed that 70% of the money from the sixth penny go toward facilities, such as the county’s contribution to the construction of Mote Marine’s Science Education Aquarium on county property located at Nathan Benderson Park near University Parkway.

This graphic shows close-up details about plans for the construction of the Mote Science Education Aquarium at Benderson Park. Image courtesy Sarasota County

The rest of the money would be divided between beach maintenance (20%) and beach renourishment (10%), Radtke added.

Originally, staff had talked about taking money from the promotions allocation to Visit Sarasota County — the county’s tourism office — for the Mote contribution, she reminded the TDC members.

In response to a question from Vice Chair Norman Schimmel, Radtke said that the potential also exists that money set aside for facilities out of that penny revenue could be used for the construction of a new Sarasota performing arts center, which is planned for The Bay Park on the City of Sarasota’s 53 acres of downtown waterfront property.

“I believe that [the money] has to be … used for publicly owned buildings,” she added. As long as that new facility remained in public ownership — as the Van Wezel Performing Arts Hall is — the building would be eligible for funds from the sixth penny, as she understands the criteria, Radtke told Schimmel.

However, she continued, “We haven’t identified a process yet for how that would work.”

When Commissioner Nancy Detert, chair of the TDC, asked about other capital projects that could gain support from that part of the sixth penny’s revenue, Radtke explained that the money could be used for “anything that basically brings tourism to the county,” including sports stadiums. She noted that, in the past, staff had had to win County Commission support to take some funding out of the promotions budget for Visit Sarasota County to help pay for improvements needed at Ed Smith Stadium in Sarasota, where the Baltimore Orioles conduct Spring Training.

In terms of beach maintenance, Radtke said, the money would not just be used for picking up trash, for example. Funds could be spent on renovating boardwalks and restrooms, for other examples. “Our beaches are one of our main tourist attractions,” she noted.

This graphic shows how revenue from the county ‘bed tax’ has been allocated for the current fiscal year. Image courtesy Sarasota County
This graphic shows how revenue from the county ‘bed tax,’ plus reserve funds, will be divvied up for the current fiscal year. Image courtesy Sarasota County

In regard to beach renourishment: Radtke pointed out that staff typically has been setting aside money year-to-year to help match state and federal grants for such undertakings, as those projects typically cost tens of millions of dollars.

A discussion of the financial implications for visitors and promotions

Kathy Lehner, president of the Venice Area Chamber of Commerce, told her colleagues on the TDC that, after seeing the item listed on the advisory board’s March 10 agenda, she checked with a representative of a Venice hotel to find out how that person felt about the county’s plans to raise the Tourist Development Tax.

The hotel representative told her, Lehner said, that, given room rates between $300 and $400 a night, the increase really would not matter. “It’s not going to add up to a lot,” Lehner added of the tax. “That made me feel a lot better.”

Before the discussion began, Virginia Haley, president of Visit Sarasota County, informed the TDC members that her organization’s board of directors had voted unanimously to endorse the proposal. “We think there’s great opportunities for tourism in the years to come,” she added.

Her staff conducted extensive research on the potential impact on hotels, Haley also pointed out. “Basically, there’s no evidence that a tax increase as small as this” would have any negative effects, Haley reported.

Lehner ended up making the motion to recommend that the County Commission revise its Tourist Development Plan ordinance, and TDC member Leon Thibeaut seconded it.

This charts provides a history of the Tourist Development Tax in Sarasota County. Image courtesy Sarasota County

Before the vote, however, TDC member Angus Rogers, the developer of the Art Ovation hotel in downtown Sarasota, complained about the fact that, in the recent past, county staff has taken away part of the promotional funding that would have gone to Visit Sarasota County so the county could pay for new priorities. When the Mote Aquarium proposal first arose, he said, “I was aghast. You cannot stop promoting the area.”

Rogers added, “We’ve seen too many times, with direct evidence,” that a reduction in spending on promotions to tourists leads to a decline in the numbers of visitors. He cited such a decision by officials of the State of Colorado, adding that that that led to fewer tourists going to Colorado destinations.

“We can’t keep going into the pocket of our great Visit Sarasota County … asking them to do more for less, over and over and over again,” Rogers stressed. “I think it’s preposterous.”

Angus Rogers. Photo from the Floridays Development website

Rogers called for strengthening of the TDT ordinance to ensure that the promotional funds for Visit Sarasota County stay intact. In fact, he said, he was surprised that a portion of the revenue from the sixth penny was not going to be allocated to promotions.

“You make a very, very good point,” Nicole Rissler, director of the county’s Parks, Recreation and Natural Resources Department, told Rogers. She added that staff spent a lot of time talking with Haley and Haley’s colleagues over the past seven months, focusing on ways to protect the funding for promotions.

Ultimately, Rissler indicated, they agreed that having dedicated money for construction projects would help with the situation.

When Rogers again asked whether county leaders could take action to limit future reductions in the promotional funds, Commissioner Detert responded, “Virginia’s been a … victim of her own success for years.”

Because of Visit Sarasota County’s track record, Detert continued, whenever new priorities arise for which staff deems TDT money appropriate, the promotional budget has been targeted.

Yet, Detert added, “Like the fishes and the loaves … we’re going to run out of fishes here.”

With the proposal Radtke had shown the TDT members in regard to the sixth penny’s allocations, Detert said, “A vote for this is a vote to protect Virginia’s budget, in a kind of back-sided way.”

Then Detert acknowledged, “Frankly, I kind of hate having another penny tax on tourists. … It’s just an irritant [like] too many toll booths.”

Nonetheless, she talked about being out and about in the county with relatives from Chicago the previous two weeks, doing “lots of touristy things.”
People who live in the county complain about the cost of pursuing those activities and about traffic congestion, Detert continued. Nonetheless, “The tourists seemed extraordinarily happy this year. They know it’s crowded. … They’re just happy to be here.”

Finally, she said of the new tax, “I don’t think this is going to break the bank.”

In response to another question, Rissler of Parks, Recreation and Natural Resources explained that the state allows for a maximum 6% Tourist Development Tax.