County Administrator Jeff Rogers gave an overview of big picture items that will be part of the upcoming budget planning process for the fiscal year 2022-2023 during the Jan. 11 county commissioners meeting.
A big-ticket item is securing debt service of $15-$20 million for the Courthouse renovation project.
“You will see a bond issuance this month, somewhere in the cost of $15-$20 million. Our goal is to roll into that the fire stations… fire station 5, and future fire station 2 and potentially the hangar for a public-private partnership that we’re putting into the budget this year at the airport- for some economic development. There’ll be an annual payment for that bond to go in the budget.”
Rogers also mentioned that with inflation, the general costs associated with running the government are increasing such as the cost of fuel and insurance. He said that while growth is a good thing, growth will increase the cost of maintaining the same level of service to county residents.
Rogers expects the increase in property values to continue along with new construction. So the county is in a good position to bring in more revenue through property taxes. Their share of sales tax should also increase with the growing economy and the growth in population.
State revenues and the tourist tax remain steady as well as gas taxes. Rogers explained that with more efficient vehicles using less fuel, the gas taxes coming in aren’t keeping up with the need to maintain roads in the county. “We’re losing money every year with gas tax,” he said.
This is where the county’s case for an additional half-cent sales tax comes into play. The county will be pursuing a half-cent sales tax to go before voters on the ballot this year, proposing that 80% of revenues go towards improving roadways in the county and 20% goes to Parks and Recreation.
Rogers reported that revenue streams funding Hernando County Fire Services, Water, Sewer, Solid Waste, Stormwater, Health Department, and Jail operations are currently sufficient.
The Administration will be reviewing building fees this month and proposed increases to impact fees will be brought to the Board of County Commissioners in March.
Commissioners then took a deep dive into why they are in favor of the half-cent sales tax. Vice-Chairman John Allocco remarked, “There’s all sorts of opinions out there. Okay, here’s the thing, it is not fair to continue and if you own a home or a piece of property, I want you to hear this. Clearly, it’s not fair for all of the cost of local government to keep falling on to you because you own a piece of property. Okay… roads need to be maintained, They need to be expanded… they need to be upgraded. It has to happen, okay? If we don’t have a revenue source that’s fair and addresses all the people in the community who are riding on our roads, including the visitors, then it’s going to fall back on the homeowners and the property owners.
None of us like taxes… But a sales tax – I can’t think of any more fair way to fund road construction expansion in this community, especially when you know that gas taxes are steady, and they will be going down over time.”
Allocco explained that the gas tax is a fee per gallon of gas purchased. The state and the federal government have not addressed how to get owners of fuel-efficient vehicles to equivalently pay for the maintenance of roads through the gas tax.
Chairman Steve Champion added that the commission has committed to lowering the millage again this upcoming fiscal year to shift the burden off of property taxpayers.
While Champion pointed to lowering the millage for the previous two budget cycles, they did not drop the millage beyond the roll-back rate which would be a true property tax decrease. It is important to note that while millage can be lowered, taxpayers may still experience a tax increase if a property’s taxable value has increased. Overall the county can bring in more money year over year if the total taxable value has increased, and the millage is lowered but does not drop less than the rollback rate.
The county currently is surveying residents to determine how to spend the potential half-cent sales tax revenues such as which roads and intersections need to be repaired and expanded. The survey will help to develop the list of projects that the county will commit to completing with the sales tax revenues. The survey is available at hernandocounty.us.
The school district developed a similar list prior to voters approving the half-cent sales tax for school building projects in 2015. They also formed an oversight committee to track and verify the expenditure of funds.
Rogers says it’s important to address road infrastructure now in order to alleviate congestion, especially as the county continues to grow in population at such a rapid rate.
“The community’s growing. everybody sees that it takes forever. It takes 20 minutes now to get across Spring Hill, right? Didn’t used to do that a lot more traffic lights, a lot more congestion, right?… You’re building 160 houses a month and we anticipate that number to be a lot higher by the end of this year…
He remarked that with larger companies moving here, there will be more jobs and one of the highest growth areas in the country is the Tampa Bay market.
“And so with that, you’re gonna be needing to widen these roadways throughout the county, whether it’s Barclay, Anderson Snow, Corporate. Mariner and Spring Hill Dr. we’re gonna have to put turn lanes in there to relieve the congestion if you want to maintain the same quality of life that our citizens have today.
He stated that in the past, the county has received $9-$10 million per year in the gas tax. Historically they have spent the gas tax on paving and maintaining roadways, signals, and right-of-ways.
He explained that some counties bond the gas tax money and widen roads with it, but they don’t pave the residential roads. He says that in places like Pasco they have a mandatory assessment to pay for paving residential roads, which ends up on the property tax bill. He says it’s crucial to diversify revenue so that the property taxes don’t support all costs.
A frequent methodology used to pave roads in Florida is the road paving Municipal Service Benefit Unit (MSBU). In Hernando County, numerous residential roads have been paved in this way. Residents apply to request a road paving MSBU and the Board of County Commissioners subsequently adopts an ordinance for its creation. The MSBU is a non-ad Valorem assessment that appears on the property owner’s annual tax bill and funds a portion of the construction costs, engineering design, permitting, inspection and testing, and administration overhead.
With 20% of the proposed sales tax going to Parks and Recreation, Rogers remarked, “You really haven’t improved your parks in this county in many, many years. You’re getting four or five thousand more people per year moving here in Hernando County and we haven’t added any new recreational amenities.”
Rogers stated that they could either fund these projects with property taxes or an outside revenue source such as sales tax.
Allocco pointed out that the sales tax funding would also act as seed money for large projects that would need to be funded in part by the state.
“There is a lot of money that’s available out there for roads, okay? But we’re not going to get any of it, if we don’t have any money to put up, okay?… And a lot of these bigger communities, why do they keep getting stuff? Because they can put forth their portion and they can get matched at different levels, okay? If we don’t have anything to match, listen, all we are is beggars at that point and there’s plenty of beggars out there.”
“Okay, so (if) we have the matching money or a portion of it to match, we will open up other funds that other communities are not going to be able to take advantage of because we’re being proactive, we’re showing that we are looking to the future. We’re not just becoming beggars for money at the state and the federal level and it makes a big difference.”
Rogers stated that during the budget process they are going to put the budget together with a .2 millage reduction and maintain 25% reserves. He anticipates having a spending plan for the Covid-19 rescue funds in the spring.
Allocco commented that the 25% reserve level helps to keep their bond rating lower and saves the county millions of dollars on the bonds they have.