A year after using Conservation Collier funds to balance the county’s nearly $2 billion budget, county commissioners are seeking ways to use state-restricted tourist development taxes for park repairs, maintenance and other uses.
The state Legislature has previously denied requests for more tourist development tax spending flexibility, but Gov. Ron DeSantis signed a law that went into effect in July that allows Monroe County to spend $35 million, its surplus TDT funds, on affordable housing for employees of private sector tourism-related businesses in the Florida Keys, an “Area of Critical State Concern.”
Using tax funds for affordable housing has been discussed by Collier and other counties, and Monroe County’s success is expected to spur more requests for other uses.
To help guide commissioners on the TDT’s restricted uses, Chris Johnson, the county’s corporate financial and management services director, gave them a crash course Oct. 22, showing uses for each penny of the tourist tax, a 5% bed tax on rentals of six months or less, including hotels, Airbnbs and campgrounds. The county expects to collect $48 million in TDT revenues for 2024-25 and about $37 million this fiscal year — a conservative estimate due to volatility, including the economy and hurricanes.
“Your reserves are currently sitting at about $80 million,” Johnson said, noting that $60.6 million represents beach reserves. “… To utilize these pennies for TDT public-facility funding, it’s required that you take in at least $10 million in TDT revenues per year, which we do.”
The state statute also requires the Board of County Commissioners to approve public-facility use with a supermajority vote, four of five commissioners; that 40% of TDT revenues be used for promotional purposes; and that the Tourist Development Council spends TDT funds to pay for an independent analysis to demonstrate the positive impact on tourist-related business.
The statute specifies uses for the first, second and third pennies: to pay debt service or to operate facilities, including convention centers, sports stadiums, arenas, coliseums, auditoriums, aquariums, museums and zoos. Those pennies also can be used to promote and advertise tourism and convention bureaus, finance beach park facilities, and for beach maintenance, renourishment, restoration and erosion control, including shoreline protection. The newest use is public facilities.
Authorized uses for the fourth penny are professional sports facility debt, operating costs of convention centers financed with tourist taxes and promoting and advertising tourism. Collier is using the fourth penny to repay debt for Paradise Coast Sports Complex, which is expected to cost $150 million. The fifth penny also can be utilized for professional sports facility and convention center debt and to promote and advertise tourism.
“There is actually a sixth penny available for use for high-tourism impact,” Johnson said, noting it has the same uses as the first three. “To take advantage of that penny, TDT sales need to exceed $600 million within the county, or 18% of total taxable sales.”
Collier qualifies because its 2023-24 fiscal year collections translate into roughly $1 billion in sales, he said. But to collect the additional penny, voters must approve a ballot referendum to raise the tax to 6% during a general election. At least two counties are doing that Nov. 5: Manatee County, which wants to raise its tax to 6%, and Indian River County, which wants an increase to 5%.
Some counties have gotten into hot water over uses of TDT funds, which require proof the use will benefit tourism. In October, Brevard TDC questioned the legality of using TDT funds to help pay beach lifeguards and is seeking an opinion from the Florida Attorney General.
A 2023 audit by the Florida auditor general found Escambia County never reviewed TDT expenditures and they weren’t authorized by the Tourist Development Council, including salaries and benefits for a marine resources division. In June, the auditor general reported the county has adopted procedures to review and document expenditures to ensure they promote tourism.
And in August, the owner of a public relations firm contracted to promote the Florida Keys was arrested and charged with 14 counts each of perjury and making false official statements involving payments to a nonexistent firm. The arrest came after the county Clerk of Courts audited Monroe County TDC, which contracted him.
During the final 2023-24 budget hearing, Collier commissioners decided to take $53.5 million in Conservation Collier funds to cover a more than $60 million budget shortfall; only Vice Chair Burt Saunders opposed. The vote angered residents and environmental groups, who said residents approved the ballot referendum because they believed the funds could only be used for conservation purposes.
A month later, commissioners adopted a resolution allowing them to take Conservation Collier funds whenever needed. By September 2024, only $29.6 million of the funds had been used and Chair Chris Hall contends it doesn’t need to be repaid.
This year, the county hired ResourceX, a priority budgeting consultant, which has suggested other ways to trim the budget, including public-private partnerships and reallocating funds.
Commissioner Bill McDaniel Jr. told Johnson he’d like ResourceX to investigate additional TDT uses. “If we can come up with an extra $2 [million] or $3 million out of the TDT tax to offset repairs, maintenance and upkeep of our park system, that frees up money in the general fund that can be reallocated for other necessary infrastructure,” McDaniel said.
Commissioners unanimously agreed to ask ResourceX to determine the latitude they have in spending TDT funds. During the same meeting, commissioners agreed to move forward with the next phase of the Paradise Coast Sports Complex and directed the TDC to consider paying for a study to determine whether TDT funds could be used for the expansion.
