Public Service Tax levy identified as one potential means of raising county revenue for high priority capital projects

Florida Statutes give charter counties the ability to levy the tax on utility payments; City of Sarasota charges its customers the full amount

A chart shows the amounts of revenue Sarasota County could realize from charging various levels of the Public Service Tax. Image courtesy Sarasota County

As the Sarasota County Commission works with staff to explore every possible means of paying for its highest priority capital projects, the county’s deputy administrator has broached one idea that is in use in a number of charter counties and cities. It is called a Public Service Tax.

Residents of the City of Sarasota are familiar with it already, Deputy County Administrator and Chief Financial Management Officer Steve Botelho indicated during a Feb. 17 presentation that was part of the County Commission’s budget workshop: The city collects the full 10% of the Public Service Tax (PST) allowed on electricity, natural gas, LP gas and water service payments.

In contrast, the City of North Port levies just a 2% PST on electricity use.

Under state law, the use of revenue from the tax is unrestricted, Botelho noted.

“We’re not proposing this today,” Botelho pointed out on Feb. 17.

However, the presentation followed a chart showing potential budget impacts of the projects the County Commission has made its top priorities: the North Extension of The Legacy Trail; the Sheriff’s Office Fleet Maintenance Facility on Laurel Road; a new courtroom facility and renovations at the R.L. Anderson Administration Center in Venice; and a new Central Energy Plant to replace aging equipment that has proven unreliable in recent times. The plant provides air conditioning to the county’s detention facilities, as well as the Silvertooth Judicial Center and other government buildings in downtown Sarasota.

A chart shows how Sarasota County municipalities are making use of the tax. Image courtesy Sarasota County

Botelho had estimated the total cost of those projects — plus the approximately $16 million the commission agreed to borrow to buy a building so the Sheriff’s Office can relocate administrative personnel and some operations — including evidence storage — to Cattleridge Road in Sarasota. That figure, Botelho showed the board, is between $120.4 million and $124.4 million.

A slide offering details on projected income from the Public Service Tax for Sarasota County, based on current figures, shows the revenue stream would range from about $2.3 million if the county levied a 1% tax on electricity, natural gas, LP gas and water, to $22,551,687 if it levied the full 10% on those services. The slide noted that the levy would not apply to the first 500 kilowatt-hours of monthly residential electrical usage.

Of the 67 counties in the state, County Administrator Tom Harmer explained, 20 — including Sarasota County — operate under charters. Twelve of them charge the PST.

In response to a question from Commissioner Charles Hines about the practices of counties closest to Sarasota, staff later provided a slide showing that neither Charlotte, nor Hillsborough, nor Pinellas nor Lee levies the tax. Manatee is not a charter county, the chart noted.

Hines also had asked that the chart provide the millage rates for the charter counties, adding that Sarasota County still has the second lowest millage rate in the state, at 3.3912.

Referencing the slide Botelho had provided earlier, Hines said he found it interesting “that all three cities in our community charge this [tax], or part of it, and we don’t.”

A chart shows which charter counties levy the tax and what their millage rates are. Image courtesy Sarasota County

The City of Venice levies the full 10% on electricity, natural gas and LP gas usage, but it does not charge the tax on water payments.

Hines pointed out that the City of Venice is preparing to build a new police department, while the City of Sarasota did so several years ago.

“We’re out there trying to do our best to save money for our citizens, buying used buildings and retrofitting things,” Hines added, referring to the Cattleridge property for the Sheriff’s Office.
Originally, the board had planned to pay for a new Public Safety Campus adjacent to the county’s Emergency Operations Center on Cattlemen Road. However, in early May 2016, Sheriff Tom Knight withdrew his support for making funding for that project part of a November 2016 referendum that would have included the new South County courts facilities and the Fleet Maintenance Facility. After Knight made his feelings known, the board chose to scrap the referendum and find alternative means of financing the projects. Subsequently, Knight’s staff worked with county staff to identify the three-story Cattleridge Road building as a means of resolving serious problems the Sheriff’s Office has dealt with in other facilities, including water leaks.

“We’re somewhat playing in an unfair playing field,” Hines continued, “because this board has been so dadgum conservative.”

He acknowledged that he is fiscally conservative as well. Nonetheless, he said, it might become necessary for Sarasota County to implement the Public Service Tax to help pay for the high priority capital needs.