Major revenue sources trending higher than originally expected as County Commission considers budget for 2022 fiscal year

Final property tax value for budgeting purposes due by July 1

These are the property value estimates from the state, as of March. Image courtesy Sarasota County

In January 2020, before the COVID-19 pandemic took hold in the United States, Florida officials estimated that the value of property would rise 5.8% for the 2022 fiscal year, Sarasota County Administrator Jonathan Lewis pointed out during the County Commission’s June 22 budget workshop.

Then, given concerns about the pandemic’s impacts on the economy, in March, state officials revised the forecast to call for a 4.2% uptick for FY 2022, which will begin on Oct. 1.

Just before the Memorial Day weekend began, on May 28, Brian Loughrey, the county’s chief deputy property appraiser, put the preliminary value at 6.3% for the county.

That means an extra $11 million for the General Fund, Deputy County Administrator and Chief Financial Management Officer Steve Botelho told the commissioners on June 22.

Board Chair Alan Maio and County Administrator Lewis both said they expect a bit more of an uptick by the time Property Appraiser Bill Furst releases the July 1 property values. The latter figures are what local governments use in setting their budgets for the next fiscal year.

This graph compares taxable values for the county. Image courtesy Sarasota County

In the 2008 fiscal year, Botelho noted, the county hit a high mark in taxable value: $62.7 billion. Then the Great Recession struck. The value dropped 42% by the 2013 fiscal year, he added — to $39.1 billion.

Finally, with the release of the July 1, 2020 property values, the county achieved a new high mark, Maio pointed out: $65.5 billion. Given the June 1, preliminary figure, the county will achieve another milestone for FY 2022: $69.6 billion, a slide showed.

Property tax revenue totaled $175.7 billion in the 2008 fiscal year, Botelho noted. That fell to $108.8 billion in FY 2013 before climbing gradually to $179.4 billion last year. This year, staff expects the number to be $190.6 billion, unless Maio is correct in his prediction that the July 1 value will be higher than the June 1 figure.

This graph shows how much the county has received in property tax revenue over the past years. Image courtesy Sarasota County

(The applicable slide did point out that the revenue figures for FY 2021 and FY 2022 are based on the assumption that 95% of the property tax payments for those years will be collected. All the other numbers, the slide said, are actual, audited figures.)

Diving into the revenue figures and department spending

Kim Radtke, director of the county’s Office of Financial Management, ran through other numbers of note, as the board members considered the preliminary data for their major revenue sources.

Comparing the adopted budget figures for the 2021 fiscal year to those budgeted as of now for the 2022 fiscal year, Radtke pointed out that the half-cent sales tax, Florida Power & Light Co. franchise fee and state revenue-sharing figures all are up. Only the Communications Services Tax number is down — from $8,885,350 in the adopted FY 2021 budget to $8.3 million projected for FY 2022. That tax, she has explained is based on landline use; thus, its decline reflects the increase in the number of people using cell phones.

Altogether, Radtke told the board, the preliminary FY22 budget puts the General Fund’s major revenues up by 5.1%, with a total of $264,401,534.

The General Fund, which contains the property tax revenue, has unrestricted uses. Therefore, commissioners can tap it if they need to fill funding gaps as a fiscal year goes on.

Among other significant revenue sources, Radtke singled out the Tourist Development Tax. Staff did lower its revenue expectation from that source to $19 million in the FY21 budget, after COVID struck, she said. However, staff’s forecast is for the total revenue it produces this year to be $22.5 million, up 18.4% in comparison to that FY21 figure.

The Tourist Development Tax funds pay for a variety of tourism-related efforts — including beach maintenance, upkeep of the two county-owned Spring Training baseball stadiums, and promotion of the county to visitors.

This slide shows preliminary figures for major county revenue sources for the 2022 fiscal year. Image courtesy Sarasota County

Radtke further noted that gas tax revenue was projected to be down 15% from FY21 to FY22. Instead, she added, staff believes the drop will be only 5.4%.

Overall, major revenue figures are predicted to be up 4%, compared to the total for FY21, she told the commissioners. The anticipated amount is $550,900,474.

Radtke showed the board members another slide that anticipates budgets of departments they control to be higher by 2.5% in FY22, compared to the FY21 figure.

The Public Works Department — which handles road resurfacing, for example — has the biggest year-over-year jump at this point in budget preparations: 9.3%. The Human Resources Department had the smallest year-over-year climb: 0.9%.

However, funding for the Health and Human Services Department is anticipated to be down 3.6% from its FY21 level, and the Governmental Relations Department is expected to need 3.1% less money, among other examples.

This chart shows details about changes in budgets from the current fiscal year to the 2022 fiscal year for departments covered by the General Fund. Image courtesy Sarasota County

The total operating expenses of those departments have been estimated to rise $3,531,888, compared to the figure the board adopted for the FY21 budget.

Among new services that will be included in the FY22 budget are the operation of a 40-bed, secured treatment facility for persons charged with low-level crimes who are suffering with mental health and/or substance abuse issues. They will be confined in that center instead of placed in the jail, the commission decided last year. The total expense forecast for that facility in FY22 is $2,629,234.

Additionally, $611,979 is expected to be available from property tax revenue for the first year of an agreement between the County Commission and the Sarasota City Commission to pay for amenities in The Bay, the park planned on about 53 bayfront acres the city owns in the area of the Van Wezel Performing Arts Hall.

The two local government bodies agreed to a tax-increment financing plan (TIF) for The Bay, with January 2020 as the baseline. Every year the value of the property in the defined TIF district increases, both the city and the county will determine how much money each would have received in property tax revenue from those upticks. Then, the money will be set aside in a trust fund. A board comprising members approved by the City and County commissions will determine the annual budget for The Bay.

After looking at that slide on June 22, Chair Maio asked Deputy County Administrator Botelho whether Bill Waddill, the chief implementation officer of the Bay Park Conservancy, knew the preliminary figure for FY22 was more than double the $250,000 county staff originally had anticipated. (A slide Botelho showed the county commissioners before their final vote on the funding mechanism, in November 2020, indicated the county’s FY22 TIF payment would be $299,556.)

“I talked to him and he was extremely happy,” Botelho replied.

These are the estimated TIF payments for the city and county over the 30-year life of the proposed agreement for The Bay Park, as of early September 2020. Image courtesy Sarasota County

Maio and Waddill worked together for years as principals of the Kimley-Horn consulting firm, Maio has noted.

Radtke of the Office of Financial Management also showed the board members a slide indicating the changes in budgets for the county’s constitutional officers from FY21 to FY22. Altogether, they represented a 7.1% increase year-over-year. The highest was for the Supervisor of Elections Office, at 19.2%. (See the related article in this issue.)

The Sheriff’s Office budget is expected to be up 7.6% for FY22, the slide said. (See the related article in this issue.)

The lowest uptick projected for a constitutional officer for FY22 was for the Clerk of Circuit Court and County Comptroller: 1.9%.