One Cent Tax 2014

Orlando Sentinel One Cent Article

If you would like answers to some of the most commonly asked questions regarding the One-Cent Sales Tax for County Infrastructure, please read through our questions and below.

What is the One-Cent Sales Tax for County Infrastructure?
 
If approved, the One-Cent Sales Tax for County Infrastructure will provide an additional penny of sales tax to be used for improving infrastructure across Seminole County. This extra penny is expected to generate, on average, $63 million a year. Twenty-five percent of the proceeds will be distributed to the Seminole County School District for capital improvements to the county’s schools, and the remaining seventy-five percent will be split amongst the county and Seminole's seven cities to fund transportation, stormwater, and other physical improvements to the infrastructure systems throughout Seminole County.

 
How much money will the sales tax raise?
 
It is anticipated that the extra penny in sales tax will raise, on average, $63 million a year. A portion of those revenues will be paid by visitors to Seminole County.

Comparatively, one mill of property tax in Seminole County generates approximately $23 million annually. This revenue is paid only by Seminole County property owners.

 
Who gets the money?
 
Twenty-five percent (25%) of the proceeds from the One-Cent Sales Tax will be distributed to the Seminole County School District for capital improvements to the county’s schools, and the remaining seventy-five percent (75%) will be split amongst the county and Seminole's seven cities to fund transportation, stormwater, and other physical improvements to the infrastructure systems throughout Seminole County.

 
What will the extra penny fund?
 
On February 11, 2014, the Board of County Commissioners passed an ordinance specifying that, if approved by the voters, the proceeds from the extra penny of sales tax would be used for:
  • construction and rehabilitation of public infrastructure, including transportation facilities, bicycle and pedestrian facilities, trails, stormwater management facilities, and other general infrastructure needs;
  • long term capital maintenance and useful life extension of public infrastructure; and
  • public education infrastructure needs.

 
Is there a specific list of projects that will receive sales tax funding?
 
The county, the seven cities, and the school board have identified numerous infrastructure needs that could be funded by the One-Cent Sales Tax for County Infrastructure. Because the needs far outpace the revenue anticipated to be generated by the extra penny, the respective local governments are currently refining the project listing, however, the proposed project list may be seen here.

 
I’ve heard the extra penny will be used to fund SunRail operations and the Lynx bus service. Is this true?
 
No. Current law prohibits the use of proceeds from the One-Cent Sales Tax for County Infrastructure for the operations of SunRail or the Lynx bus system. The One-Cent Sales Tax may be used to fund only the purchase, construction or rehabilitation of physical infrastructure facilities that have a life expectancy of 5 or more years.

 
I’ve heard the extra penny will be used by the School Board to fund curriculum-based programs. Is this true?
 
No. Current law prohibits the use of proceeds from the One-Cent Sales Tax for County Infrastructure for operational needs. The One-Cent Sales Tax may be used to fund only the purchase, construction or rehabilitation of physical infrastructure facilities that have a life expectancy of 5 or more years.

 
How can I trust that the County, Cities and School Board to use the sales tax funds as promised and not use the penny revenues as a slush fund?
 
First of all, the One-Cent Sales Tax for County Infrastructure is authorized by the Florida Statutes and must be implemented in accordance with the criteria listed in the statute. The governing law limits the expenditure of the revenue from the additional penny to uses that are associated with the financing, construction, and capital maintenance of capital infrastructure that has a life expectancy of 5 or more years.

Secondly, on February 11, 2014, the Board of County Commissioners passed an ordinance specifying that, if approved by the voters, the proceeds from the extra penny of sales tax would be used for:
  • construction and rehabilitation of public infrastructure, including transportation facilities, bicycle and pedestrian facilities, trails, stormwater management facilities, and other general infrastructure needs;
  • long term capital maintenance and useful life extension of public infrastructure; and
  • public education infrastructure needs.

The language that will appear on the ballot for the referendum also represents that the One-Cent Sales Tax will be used for the above-mentioned uses. Furthermore, the county, the seven cities, and the school board will execute interlocal agreements detailing the projects to be funded by the extra penny. All parties will be bound by the interlocal agreements as well of the ballot language and the Board of County Commissioners’ ordinance.

Finally, Seminole County has a track record with the One-Cent Sales Tax that reflects its on-going commitment to follow-through with promised improvements. In 1991, and again in 2001, Seminole County voters approved imposition of a One-Cent Sales Tax. Between 1991 and 2011, Seminole County collected over $750 million through the extra penny, funding 860 new capital projects, including approximately 170 miles of new and reconstructed roadways, 75 miles of sidewalks, 30 intersection improvements, mast arm signal installations, roadway drainage projects, and county-wide fiber optic installations.

 
When would I have to start paying the extra penny?
 
If approved by the voters, Seminole County shoppers would begin paying the extra penny in sales tax on January 1, 2015.

 
Didn’t the School Board just raise property taxes by one mill? Will I still have to pay that additional millage if the sale tax passes?
 
On March 11th, the School Board approved the interlocal agreement with The County relative to imposition of the extra penny sales tax and unanimously approved a resolution, committing to reduce the Seminole County Public School millage rate levy if the sales tax referendum passes in May.

 
Doesn’t Seminole County already impose an additional penny in sales tax for infrastructure improvements? I seem to remember a similar vote several years ago.
 
While there is currently no additional penny in sales tax place right now, Seminole County is not unfamiliar with the One-Cent Sales Tax. In 1991, and again in 2001, Seminole County electors, by a vote of 60% and 72%, respectively, approved imposition of a One-Cent Sales Tax for Infrastructure. Between 1991 and 2011, Seminole County collected over $950 million through the extra penny, funding 860 new capital projects. Additionally, the county utilized these funds to leverage over $170 million in federal and state grant funds during this period.

In 2012, Seminole County’s sales tax rate dropped to 6 cents after the Board of County Commissioners let the One-Cent Sales Tax sunset. At that time, the county had $45 million in reserve revenues from the penny sales tax, and the Board of County Commissioners felt it appropriate to forgo seeking re-authorization of the tax in order to provide its residents an opportunity for tax relief.

Seminole County’s 6 cents on the dollar sales tax rate is currently the lowest in the region.

 
Why a sales tax?
 
The One-Cent Sales Tax for County Infrastructure, unlike property taxes, is not levied against Seminole County residents and businesses only. A portion of the sales tax revenues will be paid by visitors to Seminole County, spreading the cost to construct and maintain the infrastructure to all those who benefit from it, and not just county residents and businesses.

 
Why don’t we ask the state or federal government to pay for these projects?
 
The extra penny offers a local solution to a local problem. And, while the extra penny offers a local solution, history has shown us that it could actually bring in some extra matching money. During its administration of the prior two generations of the One-Cent Sales Tax for Infrastructure, the county leveraged the sale tax revenues to bring in over $170 million in federal and state grant funds between 1991 and 2011. These state and federal grant funds may not have been available without the matching revenue from the extra penny of sales tax.

 
Why now?
 
The extra penny in sales tax is intended to help fund the $45 million a year the county will require over the next decade to continue providing the infrastructure services, including roadways, trails, and drainage facilities, at the level Seminole residents and businesses have experienced in the past.

In 2012, Seminole County’s sales tax rate dropped to 6 cents after the Board of County Commissioners let the One-Cent Sales Tax sunset. At that time, the county had $45 million in reserve revenues from the penny sales tax, and the Board of County Commissioners felt it appropriate to forgo seeking re-authorization of the tax in order to provide its residents an opportunity for tax relief. It is expected that the county's reserve fund will drop to $5.2 million by the beginning of the next fiscal year, which is far below what would be necessary to fund the identified needs.

 
When is the election?
 
On May 20, 2014, Seminole County voters will have the opportunity to cast ballots in a county-wide referendum concerning re-authorization of the One-Cent Sales Tax for County Infrastructure. In this election, voters will decide if the county's sales tax should be raised from 6 cents to 7 cents, for 10 years, to pay for new and improved transportation and drainage facilities; bicycle and pedestrian trails; and educational capital needs.

 
Why a “Special Election”?
 
As discussed above, the One-Cent Sales Tax has historically been a significant source of revenue for the county, the seven cities, and the school board. Because it has been a major funding source for infrastructure needs, if the One-Cent Sales Tax is not approved, the county, the seven cities, and the school board will have to make decisions regarding the shortfalls in revenues to fund infrastructure improvements and capital maintenance.

In 2012, Seminole County’s sales tax rate dropped to 6 cents after the Board of County Commissioners let the One-Cent Sales Tax sunset. At that time, the county had $45 million in reserve revenues from the penny sales tax, and the Board of County Commissioners felt it appropriate to forgo seeking re-authorization of the tax in order to provide its residents an opportunity for tax relief.

It is expected that the county's reserve fund will drop to $5.2 million by the beginning of the next fiscal year, which is far below what would be necessary to fund the indentified needs. The county estimates that $45 million a year will be required over the next decade for the county to continue providing the infrastructure services, including roadways, trails, and drainage facilities, at the level Seminole residents and businesses have experienced in the past.

Because it has been a major funding source for infrastructure needs, if the One-Cent Sales Tax for County Infrastructure is not approved, the county, the seven cities, and the school board will have to make decisions regarding the shortfalls in the revenues to fund infrastructure improvements and capital maintenance.

Furthermore, in 2012, Seminole County voters approved a referendum granting the school board the authority to increase the ad valorem millage rate annually by up to one mill for four years beginning July 1, 2013, and ending no later than June 30, 2017. The additional millage must be authorized by the school board annually as part of its budgeting process. In Fiscal Year 2013/2014, the school board elected to increase the ad valorem millage rate by one mill. Prior to June 30, 2014, the school board will need to decide if it will increase the ad valorem millage rate for its Fiscal Year 2014/2015 budget. While passage of the One-Cent Sales Tax for County Infrastructure does not obligate the school board to forgo imposition of the additional one mill in ad valorem taxes that was authorized by the voters in 2012, the extra penny would provide the school board with approximately $15 million in annual revenue it would not receive without the extra sales tax. This additional revenue may be considered by the school board as it deliberates setting the ad valorem millage rate for the upcoming budget year.

The county’s budget process formally begins in February, and a draft budget is to be submitted to the Board of County Commissioners by the first week in July. More importantly, the school board’s budget year begins July 1st. Holding the election in May will provide the county, the cities, and the school board with certainty regarding the availability of this significant funding source, and whether or not service cuts will be necessary and/or if additional revenue should be sought from other sources. A vote in November or August would not provide this certainty, and would force the school board into a decision regarding the extra one mill it is authorized to levy without knowing whether it will receive the anticipated $15 million dollars in revenue from the extra penny in sales tax. Any millage is only paid for by Property Owners.

 
What happens if the sales tax is not approved by the voters?
 
The One-Cent Sales Tax has historically been a significant source of revenue for the county, the seven cities, and the school board. In 2012, Seminole County’s sales tax rate dropped to 6 cents after the Board of County Commissioners let the One-Cent Sales Tax sunset. At that time, the county had $45 million in reserve revenues from the penny sales tax, and the Board of County Commissioners felt it appropriate to forgo seeking re-authorization of the tax in order to provide its residents an opportunity for tax relief. It is expected that the county's reserve fund will drop to $5.2 million by the beginning of the next fiscal year, which is far below what would be necessary to fund the indentified needs. The county estimates that $45 million a year will be required over the next decade for the county to continue providing the infrastructure services, including roadways, trails, and drainage facilities, at the level Seminole residents and businesses have experienced in the past. If the One-Cent Sales Tax for County Infrastructure is not approved, the county, the seven cities, and the school board will have to make decisions regarding the shortfalls in the revenues to fund infrastructure improvements and capital maintenance. While no specific strategies have been developed to date, without the revenue from the One-Cent Sales Tax, elected official will have to consider other options which may include service reductions and/or other revenue sources.