Biggest drop indicated through late November is 4% in gas tax funds
In the spring, as the COVID-19 pandemic was in its early stages, Sarasota County financial management staff warned of the potential for double-digit drops in major revenue streams upon which the county relies for many of its operations.
For one example, staff showed the County Commission a slide in late May with the prediction of a nearly $5.8-million drop in half-cent sales tax revenue for the 2020 fiscal year, which would end on Sept. 30.
For another example, the 1-cent sales tax — or “surtax” — voters last approved in 2007, to pay for a wide variety of new buildings and other improvements, was anticipated to drop slightly more than $7 million.
The county’s municipalities and the Sarasota County School Board also receive portions of the surtax for projects.
However, as months passed and revenue flowed in, the picture changed significantly.
The commissioners agreed to a number of steps earlier this year to reduce county expenses, based on worries about the negative impacts of the novel coronavirus pandemic. Altogether, as County Administrator Jonathan Lewis has pointed out, staff “paused” the expenditure of approximately $5 million out of the General Fund, which is made up largely of property tax revenue. The General Fund pays for operations of a number of county departments and those of certain constitutional officers, such as the sheriff and the supervisor of elections.
By early October, however, Deputy County Administrator and Chief Financial Management Officer Steve Botelho was reporting to the commissioners that, instead of those double-digit drops in major revenue sources, the decreases were coming in at single-digit levels. Both the surtax revenue and the half-cent sales tax revenue through July were down only 3%, compared to the original budgeted figures.
By early fall, the situation was maintaining that positive trend. On Oct. 7, during a regular County Commission meeting, Botelho said the county is “in much better shape [financially] than where we thought we were going to be.”
Then, on the morning of Nov. 30, Botelho had even better news to share.
In an email to the commissioners, he pointed out that staff had been continuing to monitor the revenue figures for September, the final month of the 2020 fiscal year. Although staff did not yet have the final Tourist Development Tax — or “bed tax” — revenue, he noted, “For now, I thought you would like to see what has booked thus far as there have been further improvements to the % change gaps.”
Through September, the half-cent sales tax revenue was down $693,561 — 2% — compared to the original budgeted figure for the 2020 fiscal year: $33,531,201.
The surtax revenue was budgeted at $40,660,951 for the 2020 fiscal year. It was down only 1%, a drop of $495,491.
The biggest decrease among all the major revenue sources Botelho noted was shown for the gas taxes. Instead of the $17,775,001 budgeted for the 2020 fiscal year, the amount through September was $17,063,047, reflecting a 4% drop.
According to a fact sheet county staff produced after the adoption of the 2020 fiscal year budget, the half-cent sales tax revenue was to make up 7% of the major revenue sources, while the surtax revenue was expected to account for 11.2% and the gas taxes were to make up 5.2% of the total $496,187,187.
“Great news,” Commissioner Alan Maio responded in a Nov. 30 email to Botelho. “Can’t wait to see the final [figures].”
In recent weeks, Commissioner Maio had predicted that the biggest decrease in any of the major revenue sources staff was tracking would be 5%.
As for the Tourist Development Tax revenue: Even though Sarasota County Tax Collector Barbara Ford-Coates and her staff last month released reports showing collections for September, Deputy Tax Collector Rana Moye explained to The Sarasota News Leader in early July that the office distributes the funds it has collected “at the end of the month.”
The News Leader had asked for a clarification in July, after Botelho provided an update on county finances to the commissioners. He mentioned at the time that staff did not have the Tourist Development Tax funds, even though the Tax Collector’s Office had released data reflecting the period Botelho was referencing.
Moye noted that the amount of money the Tax Collector’s Office turns over to county staff includes not only the bed tax revenue, “but other monies as well (delinquent payments, back taxes owed, collections for other months, etc.).”
During the October discussion, Botelho explained to the commissioners that staff would not have official figures for the 2020 fiscal year until this month or January 2021, after auditors have delved into county records to prepare the Comprehensive Annual Financial Report, or CAFR.