St. Johns County voters might be forgiven for a certain ambivalence when considering a ballot referendum concerning a proposed sales tax increase of 1%. Differing sets of numbers presented by the county and referendum opponents during a town hall meeting Wednesday, Oct. 26, prove difficult to reconcile, leaving the issue potentially unsettled for the undecided voter.
If approved during the Nov. 8 general election, the surtax would raise sales taxes in the county from 6.5 cents to 7.5 cents on every dollar spent on the first $5,000 in taxable personal property purchases. This would not apply to things like groceries or prescription medications that are exempt from sales tax.
The surtax would sunset after 10 years and can only be applied to capital infrastructure expenses. It is projected to generate about $500 million over the next decade, enough to compensate for a revenue shortfall and to fund several projects identified by county department heads as priorities.
County officials have identified several causes for this shortfall, most notably a reduction in impact fees levied on residential property developers in the wake of the 2008 recession to encourage development at a time when it had come to a halt.
In 2018, the County Commission corrected its course as development returned, increasing impact fees to the maximum allowed by state statute. But that did nothing to compensate for a loss in revenue attributed to the reduced fees.
But, depending upon whom you ask, either 85% or 60% of the surtax burden would be borne by the residents, while visitors in the tourism-rich county would fund the remainder.
At the meeting, hosted by the Palm Valley Community Association, resident Nicole Crosby presented data she’d found on the county’s website showing that visitors would pay only 15% of the tax. The site reported that tourist spending was about $712 million in the last fiscal year, about 15% of overall spending on taxable personal property during that period.
Since Crosby first brought this to the county’s attention, however, the site was updated to say visitors spent $2.4 billion and that the $712 million figure was 10 years old. This supports the county’s position that visitors’ purchases account for an estimated range of 28-40% of all spending on taxable personal property.
However, because web pages are preserved on Internet Archive, it is possible to verify that the outdated figure was being presented to the public as current as late as May 16, 2022.
The degree to which visitors pay the surtax doesn’t directly address the need for the increase, as put forth by the county, but the mix-up contributed to the overall confusion.
“It would be nice if we could agree on those numbers and if county administrators would pay more attention to the details as to what’s on the website,” said one member of the audience. “Not doing that does not help the trust relationship.”
At the same time, opponents presented some figures that Jesse Dunn, director for the county’s Office of Management and Budget, disputed.
A self-proclaimed political advertisement paid for by 1st Coast Conservatives United and handed out at the meeting claimed that the penny would be a 15% increase in the retail sales tax burden on county consumers.
The claim is not incorrect, but a careful reading is required. One penny is 15% of the current 6.5 cents; thus, changing to 7.5 cents would represent an increase of 15% of the existing rate. However, it would not mark a 15% increase in the sales tax itself. That remains 1%.
If you spend $100 on taxable personal property today, you would pay an additional $6.50 in sales tax. If the referendum passes, you would pay $7.50 on that same purchase.
The handout also claims that the commission voted to increase the property millage rate by 12.5% over last year. This is incorrect. However, in her presentation, Crosby correctly stated that the current rate is 12.5% over the rolled-back rate.
Another sticking point for opponents of the surtax was the list of projects it would fund, one of which is a widening of Mickler Road, which Crosby opposed.
Some attendees also opposed various projects on the list with one member of the audience saying he didn’t support any of the projects.
This may be the proposal’s Achilles heel. Dunn admitted that any list of essential projects the county drew up would always find detractors.
While residents in one area of the county feel a new park or library, or, for that matter, police or fire station, is essential, residents living elsewhere may differ.
In preparing the list, the county asked department directors for projects they deemed priorities. The cost of these projects adds up to about $500 million — including $240 million for road improvements.
If the referendum fails, the only other way to pay for these projects would be to raise property taxes. And that is something no county commissioner has yet to support.
