Wednesday, Oct 22, 2014
Local News

County seeks 1 cent extension now for planning purposes


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Voters in Highlands County will decide on Aug. 26 on extending the county’s 1 cent sales tax for 15 years starting on Jan. 1, 2019.

The county stresses that this is not an additional tax, but an extension of an existing tax, which is also called the infrastructure surtax.

But, with more than four years remaining on the current 1 cent sales tax extension, why is the county seeking another extension at this time?

There are two reasons the county has decided to go for a vote now on the extension when it is not set to expire until 2019, Highlands County Community Programs/Administrative Project Manager Chris Benson said.

The first reason is that the county utilizes the funds from the tax to construct and maintain large infrastructure improvements in the county, he said. The planning for those improvements is not year-to-year. It requires long-range planning.

For example when a road is inspected it may be determined that it is all right now, but it will need to be repaved three, four or five years from now.

“So the improvements we are planning are further away, but if we don’t have that dedicated funding source, we will have to then plan for something else,” Benson said.

The other component is in the event the county needs to finance a project, he explained. The county receives about $8 million annually from the tax, but with all the reoccurring infrastructure needs it may not be enough for a large project. So the county would have to borrow funds to pay for a large project.

In order to borrow and make payments on the loan, the funding source has to be in place for the duration of the loan, Benson said. “If it is not, then we have to come up with some other revenue source.”

Voters would have to approve the debt if it was to be paid back with property taxes, he said. “We can’t commit property taxes to pay that loan, but we can commit these funding sources only if that funding source is available and guaranteed.”

With only a little over four years remaining on the infrastructure surtax, if the county was to borrow money it would have to be paid back within that time period, Benson said.

Previously the 1 cent sales tax was voted on for renewal in 1999 when it was going to expire in 2004, he noted. “You don’t want to wait until two years before it expires to renew it because we would need to come up with alternative revenue sources in the event it wasn’t approved.”

What happens if voters do not approve the extension?

“We will be scrambling to identify alternative revenue sources and making the decision on whether or not we would make another attempt at another election,” Benson said. Property taxes would be the only other directly related revenue source that the county would be forced to go to.

County Commissioner Don Elwell said if it doesn’t pass this year the county would have two more opportunities (2016 and 2018) before it expires to possibly bring it back to the voters.

It is a very important source of revenue for the county, he said.

At its workshop on Wednesday, the county commission discussed that about 45 to 55 miles of roads should be resurfaced annually, Elwell said, but, the county is currently resurfacing about 30 miles of roads.

“If you do that for enough years you will get pretty far behind and your roads might become in greater state of disrepair,” he said.

So even though this tax has been used for other things besides roads, Elwell said, he believes this commission will try to return the use of the tax revenue back to the most important “need-oriented projects” like roads and things that are truly infrastructure as opposed to more “wish-list items,” which were taken off the regular budget and placed on the infrastructure budget in order to keep the regular budget lower.

mvalero@highlandstoday.com

(863) 386-5826

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