Sarasota County’s revenue collections in good shape through July, with ‘bed tax’ funds leading the way

First hearing on proposed 2022 fiscal year budget set for 5:30 p.m. on Sept. 13

This chart provides details about major sources of county revenue. Image courtesy Sarasota County

During a recent review of Sarasota County’s revenue collections through July, the director of the county’s Office of Financial Management made it clear that one account has been far exceeding the others.

Referring to the “bed tax” revenue, Kim Radtke pointed out on Aug. 27, “TDT is doing very well.”

The 5% Tourist Development Tax, charged on all rentals of accommodations for six months or less time, had brought in 46% more money through July than the Office of Financial Management (OFM) had projected, according to a slide that Radtke showed the commissioners during their last budget workshop.

Instead of the $14,407,787 that the OFM had projected through July, the total was $21,096,862, a 46% increase.

As Virginia Haley, president of Visit Sarasota County (VSC), the county’s tourism office, has underscored in her reports to local government leaders in recent months, the number of visitors to the county since spring — and their spending — has, at times, exceeded marks set in 2019, before the COVID-19 pandemic began.

In her June tourism report, Haley pointed out that the count of visitors staying in paid lodging for that month in 2019 was 99,300; for June of this year, it was 132,700, a 33.6% increase. Their spending this June was up 44.1%, compared to the figure for June 2019, she added.

Overall, Radtke told the commissioners on Aug. 27, “We are doing very well,” with revenue, compared to staff projections, which were more conservative than usual, given the pandemic.

“We are very fortunate in Sarasota County, and this is the golden county on the Southwest Florida coast,” Chair Alan Maio responded.

This chart compares the budgets for elected and appointed county officials for the 2021 and 2022 fiscal years. Image courtesy Sarasota County
These are the budgeted funds for the 2021 and 2022 fiscal years for the county’s constitutional officers. Image courtesy Sarasota County

“This is nobody’s expectation,” Maio said of the revenue figures in the PowerPoint presentation, especially given the economic forecast in March and April of 2020.

“We plugged in major reductions in these revenue sources because COVID was beginning,” he continued, “and we really had no idea [how much of a financial impact the pandemic would have].”

“We did not lay off people,” Maio stressed of county leaders. “We did not stop the Capital Improvement plans,” he said, referring to numerous construction projects that staff has been managing.

“It’s a shock that the sales tax revenue was above what we projected, considering COVID,” Commissioner Nancy Detert pointed out, noting the OFM figures.

The county’s Surtax revenue was up 7% through July, compared to the budget projection. The extra penny of sales tax, which has voter approval, funds a wide array of undertakings, including road resurfacing.

The total Surtax funds through July were higher by $2,077,592 than expected. The total was $31,169,592.

Her assumption, Detert continued, was that the state’s new internet sales tax had contributed to that good news. In previous years, she noted, “We didn’t get that money.”

“Since everyone was home and ordered online [during the early days of the pandemic],” Detert said, “we still benefited. Is that correct?” she asked Radtke.

“I would say that’s a good potential as to why it is increased,” Radtke responded of the Surtax funds.

Commissioner Nancy Detert. File image

“What’s down is gas tax,” Detert pointed out.

Radtke’s slide showed the revenue total from all gas taxes through July was up just $46,760, compared to the figure built into the current fiscal year budget.

Detert added that she expects gas tax revenue to continue to decline, given the increase in the number of electric vehicles on the roads and the higher mileage of newer vehicles in general.

When Detert asked Radtke whether staff had developed any strategies to try to counter those effects on the gas tax collections, Radtke told her, “We’ve been very conservative [in projections].”

The funds brought in through July were up 18%, compared to the staff estimate, based on COVID concerns. The latter figure — $10,452,450 — was lower than the amount budgeted, however. The budget number was $12,297,000.

For the 2022 fiscal year, which will begin on Oct. 1, Radtke continued, staff is being conservative once again in its estimate.

“I think what we will need to plan for is a new source of revenue, locally,” Detert told her. “It used to be a nice thing: You paid gas tax and it paid for roads,” she added.

State leaders are “going to have to come up with a new way to fund roads,” Detert said.

Then County Administrator Jonathan Lewis noted that during recent Florida Association of Counties (FAC) workshops, “We spent a lot of time on [the gas tax revenue issue].” Florida’s legislators, he continued, “haven’t quite pulled the trigger there on a statewide solution.”

Some of the proposals she had heard would shock county residents, Detert told him. For example, one calls for taxing people on the basis of how much they drive. “I don’t think anybody in this community supports that notion,” Detert pointed out.

Commissioner Ron Cutsinger noted, “Certainly, we’re moving very rapidly to the electric vehicles, so that’s going to be a major change.”

Cutsinger — who just was elected to his seat in November 2020 — did ask Radtke to explain what constitutes the revenue sharing funds listed on the same slide.

That category refers to a state program through which sales tax revenue is shared on the basis of county population, she replied.

State officials had reduced the amount, Lewis said. (The slide noted that the total through July was 3% lower than the amount county staff had budgeted.)

However, Lewis added, “At the end of their fiscal year, it may be a little bit better.”

Comparing this fiscal year’s budget to the FY 2022 budget

This chart compares major revenue sources budgeted for the 2021 and 2022 fiscal years. Image courtesy Sarasota County

Radtke also presented the board members slides showing changes in specific revenue amounts from the budget they adopted for the 2021 fiscal year and the amounts in the proposed budget for the 2022 fiscal year.

Revenues that go into the General Fund would be 5.7% higher in the new fiscal year, for example.

The General Fund is the most flexible of all county accounts. Although it pays for operations of many county departments — as well as those of some of the constitutional officers, such as the sheriff and the supervisor of elections — it is the source to which the commissioners typically look when they need extra funding for a purpose that was not anticipated at the time the budget was adopted.

Other revenue sources in the 2022 fiscal year budget — such as money brought in by the county’s Public Utilities Department fees — are projected to be up 3.1%, compared to the total for the 2021 fiscal year, the slide said.

Among revenue sources in the “Other” category that have been anticipated to be lower in FY 2022 are impact fees — money developers pay to help cover the county’s expense for services to the new communities. The amount budgeted for FY 2021 was $37,103,500; for FY 2022, the figure is $29,924,046.

On the other hand, utility revenue is expected to be close to $7 million higher in FY 2022.

Since the commissioners conducted their budget workshops in late June, Radtke continued, the Sarasota County Sheriff’s Office had provided its final budget projections for the new fiscal year, which will begin on Oct. 1; those rose by approximately $921,800.

For example, the department is planning for more grant funds, she said: $437,700.

Additionally, she noted, a total of about $484,100 has been added in to cover the expense of a new fraud unit, which will have three detectives. Of the new grant funds, the slide showed, $100,000 would be dedicated to the Fraud Unit.

Overall, Radtke pointed out, the total county budget for the 2022 fiscal year, as of Aug. 27, added up to $1,541,381,660, a 15.6% increase from the figure for the current fiscal year.

This pie chart, included in the backup agenda material for the Aug. 27 budget workshop, shows the projections for various portions of the budget for the 2022 fiscal year, which will begin on Oct. 1. Image courtesy Sarasota County

The county’s first public hearing on the FY 2022 budget is set for 5:30 p.m. on Monday, Sept. 13. It will be held in the Commission Chambers of the County Administration Center located in downtown Sarasota: 1660 Ringling Blvd.

Among the votes the board is to take that night, it is expected to approve the annual Stormwater Service Assessment for the 2022 fiscal year, the annual assessment for the Fire and Rescue District, and proposed millage rates for special districts, including the Siesta Key Village Public Improvement District and the county lighting districts.

Public comments are welcome.