County weighs increase to lodging tax
The public will have a chance next month to weigh in on a Tourist Development Council proposal to boost the two-cent bed tax by another penny.
TDC Director John Solomon outlined the recommendation Tuesday morning to county commissioners, a week after the TDC board approved sending it on to the county. Commissioners have the option to approve the increase by a supermajority, meaning four members must vote in favor, or putting it to a vote at a public referendum
“Basically, the additional 1 percent would be for infrastructure,” said Solomon, who provided commissioners with data showing Franklin is one of only five counties in the state whose bed tax rate is set to the minimum 2 percent.
The four others, Gadsden, Glades, Hardee and Sumter, are not regarded as tourist-dependent counties, and raise a fraction of the $1.4 million Franklin County brought in from the tax which is levied on patrons of transient lodging, such as motels, bed-and-breakfasts and RVs.
Solomon noted that Gulf County, whose bed tax is at 5 percent, attracts fewer tourists but raises about $400,000 more annually than here. “The highest in the state is 6 percent,” he said. “It can go to 7.”
He estimated that if commissioners approve the proposal to raise the bed tax to 3 percent, annual revenue from the bed tax would rise from about $1.4 million to $2.1 million.
Commissioners appeared willing to support an increase if it were earmarked for infrastructure improvements.
“As I look at statistics from all 67 counties, why don’t we consider a 2 percent increase?” asked Commissioner Bert Boldt. “We really are surging in tourists coming here, and there’s a lot of need to support the infrastructure tourists are using.”
Commissioner Smokey Parrish agreed infrastructure must be the priority for any additional monies.
“I’d like to see people better accommodated when they come here,” he said, noting that parking issues contain to be a problem during high-traffic months of the year.
“Apalachicola needs some parking too,” he said. “I’ve been talking about this for 10 years and trying to get infrastructure done. You need more infrastructure produced to accommodate the people.
Clerk of Courts Marcia Johnson pressed for more specifics on where the additional monies would be spent.
“We need a plan exactly how you’re going to spend this money,” she said. “There’s a lot of conditions on this money.”
County Attorney Michael Shuler said the TDC operates under an existing spending plan, in which 60 percent is spent on infrastructure and 40 percent on other expenses.
“TDC funds are restricted,” he said. “Whatever infrastructure would have to meet those restrictions in statute and have to be qualified expenditures.”
Solomon added that infrastructure decisions remain in the hands of the county commissioners, following a recommendation from the TDC board.
“The TDC board in the past hasn’t made infrastructure decisions,” he said. “It comes down to what the county commission wants to do.”
Solomon noted that with additional revenue, spending projects such as building new bathrooms on St. George Island, which is slated for this fall, can be paid off at a faster pace. In the case of the bathrooms, it would be in two years, rather than four, he said.
“This can help with infrastructure and pay to maintain the infrastructure we do have,” he said. “We’re really handicapped after 12 or 14 years of being one of the lowest (bed tax rates) in the state.”
In addition, studies in the wake of the coronavirus shutdown have shown that Franklin County is one of the most tourist-dependent economies in the state, in terms of jobs and revenue produced. Solomon provided statistics that indicated total visitor spending has grown from an estimated $245 million annually in 2016 to $272 million in 2018, with nearly two thirds of all jobs in the county supported by visitor spending.
County commissioners unanimously supported a motion by Ricky Jones, who chairs the TDC, to add discussion of specifics on the bed tax to a workshop slated for Tuesday afternoon, July 7. That workshop was previously scheduled to seek input regarding the possible closing of certain beach access points in Alligator Point, parking issues at county beach locations, and alternative funding to assist the county with creating additional parking and better traffic control at all county beach locations.
“We want to customize where that money goes,” said Boldt. “We want to affirm this 1 percent and work out a strategy where it would be spent before we approve that one penny.”
Parrish withheld his full-throated endorsement.
“If you can’t spend the money where it needs to go, I’m probably not for it,” he said. “Then all you can do with the money is more advertising.”
COVID-19 hits tourism hard
To show the loss of revenue to county businesses due to the coronavirus, you need look no further than the latest bed tax revenue numbers.
In February, the county numbers were riding high, as the 2 percent tax on transient lodging brought in more than $95,000, a record for that month, and a whopping 43 percent over the last year’s roughly $66,700.
But in March, the county’s fortune has reversed, as revenues plunged by a nearly identical 44 percent, dropping from nearly $128,000 in 2019 to about $72,000, nearly as low as it was eight years ago.
As it stands now, year to date revenue is running about $1,000 ahead of last year, with the booming summer months looming on the horizon.
John Solomon, the TDC director, told county commissioners he expects the annual revenue for the fiscal year, which ends Sept. 30, will fall short of last year’s record-breaking $1.4 million.
“I’m predicting $1.1 million if nothing changes,” he said. “About a $300,000 loss for this year.”