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Proposed Ordinance Imposing Local Government Infrastructure Surtax
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BRIEF OVERVIEW
The Local Government Infrastructure Surtax Tax (one-cent sales tax) is a revenue source that is authorized by Fla. Stat. § 212.055(2) and effective upon an affirmative vote by referendum of a majority of a county’s voters. The revenues raised from the tax may be used to address a wide variety of infrastructure needs facing local governments, as well as a recent statutorily authorized use to dedicate a portion of the proceeds to economic development.
Pursuant to Fla. Stat. § 212.055(2), the eligible uses of the tax are:
1. The financing, planning, and construction of infrastructure; to acquire land for public recreation, conservation, or protection of natural resources; or, to finance the closure of solid waste landfills that have been closed or are required to be closed by order of the Department of Environmental Protection. In this context, infrastructure means any capital expenditure associated with reconstruction, construction, or improvement of a public facility that has a life expectancy of five or more years, including land acquisition, land improvement, design, and engineering. Public safety vehicles with a life expectancy of 5 or more years are also eligible.
2. Providing for the needs of the judiciary, such as the construction, leasing, or maintaining of court facilities.
3. Providing for energy conservation and efficiency improvements that reduce consumption through conservation or a more efficient use of electricity, natural gas, propane, or other forms of energy on the property, including, but not limited to, air sealing; installation of insulation; installation of energy-efficient heating, cooling, or ventilation systems; installation of solar panels; building modifications to increase the use of daylight or shade; replacement of windows; installation of energy controls or energy recovery systems; installation of electric vehicle charging equipment; and installation of efficient lighting equipment.
4. Providing for other eligible expenditures related to investment in private facilities for emergency shelter/staging area for emergency response and residential housing units.
5. If a county has a population greater than 75,000 and its real property has a taxable value less than 60% of the just value, a county can use the proceeds for the operation and maintenance of parks and recreation facilities established with the proceeds of the surtax throughout the duration of the surtax levy.
6. Additionally, the statute allows for up to 15% of the sales tax to be deposited into a trust fund for the purpose of funding economic development projects having a general public purpose of improving local economies, including the funding of operational costs and incentives related to economic development.
Please note that proceeds from the surtax may not be used for the operational expenses of the infrastructure improvements. If placed on the November 2024 ballot and the referendum is approved by the electorate, the collection of the tax would begin effective on January 1, 2025, and continue through December 31, 2054.
Please also note that while the Board requested that the ballot question be drafted with the proposed uses of the levy be listed with bullet points, the Florida Division of Elections had not approved such a ballot layout as of the date of this agenda item. Thus, the attached, proposed ordinance lists the proposed uses of the levy in a traditional list. Should the DOE subsequently approve the bullet point layout, the Board can amend this ordinance.
FINANCIAL IMPACT
A 1.0 percent (1%) surtax will result in a ONE-CENT (1¢) surtax on each ONE AND NO/100 DOLLAR ($1.00) sale for 30 years. The estimated revenue in year one would be approximately $36M.
LEGAL NOTE
The Board has the authority to adopt this Ordinance pursuant to Fla. Stat. § §125.01 and 212.055(2).
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RECOMMENDATION
A matter of public policy.