In May, the Pelican Press reported on a quarter-billion dollar shortfall in estimated receipts of the voter-approved Local Option Sales Tax (LOST). On July 8, the Sarasota county commissioners began what will be an annual exercise over the coming decades – what gets cut from the project list?
The 2007 referendum on the funds was held at the zenith of the economic boom. Property values were at unheard-of levels and people were spending like there was no tomorrow. Then the bubble burst. As property values slipped, refinancing of homes became difficult. As unemployment grew, spending dropped.
When spending slowed, so did sales tax receipts. The ever-upward revenue curves used by the commissioners to sell the referendum started going in the opposite direction. The original estimate for this year was $41.2 million in sales tax receipts. The reality will be more like $29.5 million, county officials have said.
The gap between the hot estimates of 2007 and the colder "out-years" means there will be $253,299,423.00 less for the lengthy list of promises, according to county figures. "How to match the projects with the money?" asked Deputy County Administrator Dave Bullock on July 8. "It’s too early to modify the [capital improvement projects list], but in the coming months we’ll report on projects to modify, adjust or eliminate."
SPAT OVER TERMS
The county used the LOST money to support two bond issues. As the economy unraveled, the county wanted to "jump-start" projects and get people working. The project list was "front-loaded" with bond money, but at a cost. Interest on the bonds would eat up $85 million in LOST revenue.
"We’re doing what every economist says we should do – invest in your infrastructure," said Bullock. "This is the right time to do that, and people need those jobs more than ever before."
The county’s stimulus program is $125 million, vastly greater than the $30 million to $50 million expected from the federal government.
Bullock said staff members had invented a new accounting term they had dubbed "beyond five years." He admitted it was not the best term, but it was useful to describe how staff was planning to handle the shortfall.
"It’s a holding place for projects and programs," he said. "It reflects the difference between projected revenues and real revenues."
County Commissioner Nora Patterson intervened at that point. "There is a larger question – there may not be enough money to do all the projects." Bullock responded, "We’ll evaluate that annually. But if nothing changes from the [funding] forecasts, we may need to establish priorities."
Any decisions and priorities are premature at this point. The LOST monies won’t start to be collected until October. However, all indications point to a dramatic and continuing drop in sales tax revenue compared to amounts accumulated in years past, and well below the rosy estimates of 2007.
SPATS OVER PROJECTS
Almost like bubbles from a spring, project names spurted from the lips of commissioners: Midnight Pass Road, the Celery Fields, the Fruitville Initiative, Siesta Beach enhancements, Benderson Park and more. "We have not deleted any programs or projects," said Bullock.
"Siesta Beach enhancements were in for $12 million. But now it’s $8 million in the first five years. If that eight is reduced to six, we’ll never see closure while I’m still on the board," said Patterson. She verbalized what probably was going thought the minds of the other four: What was promised that won’t be delivered?
Commission Chairman Jon Thaxton’s voice rose when he said, "These projects may never get funded after all the promises we made to the voters." His particular concern was restoration of spoil islands in Roberts Bay. "We portrayed it as a priority, and it should be. We have nothing now. It’s been moved to never-never land," he said.
"We promised the public all kinds of things in the first five years that won’t happen because the money’s not there," said Patterson.
"This is a dramatic shift of tens of millions of dollars in the capital improvement program," said Thaxton. "The staff is making major and substantive changes."
All Bullock said was, "We’ll be back to you in the next calendar year."