Ahead of the county’s 2018 budget presentations to the Board of County Commission July 18 and Aug. 1, Commissioner Jay Morris said St. Johns County will have no funding sources moving forward unless its leaders act quickly to enact a new revenue source, such as an increase in its sales tax.
“We no longer have any other choices,” said Morris in an interview with the Recorder. “We still have a viable way to get out, and it’s going to be up to this county commission to do it.”
Morris is continuing to advocate for a one-cent increase to the county’s sales tax to prevent what he says is a looming financial crisis that could hit the county by 2019.
According to the commissioner, the county is today operating on a budget of $673 million, which is $60 million less than what it was in 2007. Over the past 10 years, in which the county’s revenue has incrementally dropped due to a decrease in its millage rate, Morris said it has been forced to defer maintenance, including basic infrastructure like bridges and roads, and also defer capital expenditures. As a result, he said St. Johns County is $300 million “in the hole” in both categories.
At the same time, Morris noted, St. Johns County is the fastest growing county in the state and 35th fastest growing county in the nation, jumping from 174,000 residents in 2007 to 242,000 today. Consequently, the county is required to provide services to more people with less money, he said.
“We’re operating on a budget $60 million less than what we had 10 years ago, and we have a 39 percent increase in our population,” said Morris, who has consistently said he will not run for reelection next year. “That combination is going to sink you, and that’s what’s happening.”
Further complicating the situation, Morris explained, is the state legislature’s efforts to put a measure on the ballot in November 2018 that would increase the homestead exemption to $75,000 – a move that, if passed, would reduce St. Johns County revenues by an estimated $9-10 million. Morris said the only way to counteract this potential loss would be to enact the sales tax this year so that the county could start collecting in 2018. According to Morris, the increased sales tax would bring in $32-33 million dollars annually for the county.
If the county waits until 2018 to vote on the tax, Morris said it won’t be able to start collecting until 2019, when the increased homestead exemption, if passed, would go into effect. Right off the bat, the commissioner hypothetically noted, the county would lose up to $10 million of its $32-33 million in earnings from the increased tax. Add in the millions of dollars in Hurricane Matthew restoration costs, Morris said, and St. Johns County has a troubling financial future that needs to be addressed as soon as possible.
The commissioner, who unsuccessfully pushed for a sales tax increase in 2015, believes it’s the most logical solution to the county’s problem because he says 38 percent of it will be picked up by the more than 6 million tourists that visit St. Johns County each year. He said the only other option would be to implement a 1.5-mill increase in property taxes, which would also provide the county with around $32 million each year. Morris noted, however, that residents would pay 100 percent of that tax.
“Wouldn’t you be far better off with a sales tax bringing in $32 million that tourists pay almost 40 percent of, versus a property tax increase in which the residents are going to pay 100 percent of?” inquired Morris, who added that he doesn’t believe a gas tax or bed tax will solve the county’s problems.
The only way in which the county could enact this sales tax increase and start collecting in 2018, he said, is by voting at one of the two upcoming commission meetings to put a referendum on a special ballot in November that would allow residents to vote on the issue. According to Vicky Oakes, the county’s supervisor of elections, the deadline to place a referendum on the ballot is Aug. 1.
Morris said it’s up to Commission Chair Jimmy Johns to place the item on the meeting agenda. Then, the measure would need to pass with three of five commissioners voting for it. If it were to pass, county spokesman Michael Ryan said a public hearing would need to be held after the vote. Ryan added that such a hearing needs to be advertised in the media at least 10 days prior to it being held.
Morris doesn’t foresee the issue being added to the July 18 meeting, which leaves Aug. 1 as the last viable time to vote to add the referendum to the November ballot and potentially set the county up to start collecting from the tax in 2018. If that doesn’t happen, he said the county would probably have to wait until the general election in November 2018 to enact such a measure.
Oakes reemphasized that for the county to institute a sales tax increase and start collecting in 2018, it needs to do so before Jan 1, 2018. She said the BCC could pay to hold a special election between November 2017 and November 2018, but the increase wouldn’t take effect until 2019 anyways. As a result, she agrees with Morris that it would make most sense to wait until the general election in November 2018 if nothing can be done by Aug. 1 of this year.
Regarding the July 18 and Aug. 1 BCC meetings, Morris said he expects to hear two different presentations from county staff regarding the 2018 budget: one that requires cutting funding for various departments and another that requires tapping into the county’s reserves. The commissioner said the latter is the more probable option because there really isn’t anything more to cut. For 2017, he said the county only had $4 million left to allocate to 12 different departments that were requesting a total of $22 million dollars. As a result, Morris noted the county was left this year with an $18 million deficit, which he said will similarly repeat itself in subsequent years if nothing changes.
“This is how rapidly we’re going under,” said Morris, who is pleading for residents to contact their commissioners regarding the increased sales tax. “The residents of St. Johns County have no idea about any of this.”