Equitable sales-tax increase may be key to economic recovery

It’s no secret that due to the pandemic, Florida is suffering an unprecedented economic downturn, with state budget cuts looming ahead. Yet even in these dark times, it’s important to remember that every adversity carries with it the seed of an equal or even greater benefit. One action seed for the future is to shine a spotlight on the inequitable distribution of Florida’s sales tax and fix it.

Of the 6-cent statewide sales tax, the state of Florida retains 5½ cents collected from all 67 counties to spend as the legislature sees fit. The counties receive a measly half-cent. Five counties — Miami-Dade, Orange, Broward, Palm Beach, and Hillsborough — make up nearly half of the current annual statewide collection of $22 billion, which supports 78 percent of the state’s entire general-revenue budget.

Of those highly populated, tourism areas, Orange County’s per capita contribution by

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RATES far leads the pack at nearly two and half times as much as any other Florida county. These generous collections support the state budget, but are unfair for the counties that desperately need funds to meet the needs of their growing resident and visitor populations and now to restore their damaged local economies.

It continues to be wise to try to diversify our Florida economy, but the reality remains that tourism will continue to be the driving force. Sunshine, beaches, environmental beauty, and theme parks draw people here. While we and the other counties roll out the welcome mat, we deserve a fair deal for how to fund the impacts of the tourists who flock here. “Impacts” include their share of roads, transit, sewer, public safety, healthcare, affordable worker housing, and more.

Florida has always been reluctant to face the revenue needed to create a truly great state, and consequently, we lag behind in most critical national benchmarks. In 1949, the Florida Legislature first enacted a 3-cent sales tax. Over the years, they adopted two increases, including the last one — 32 long years ago — to 6 cents. Florida’s population at that time was 12.3 million, which now has almost doubled. In Central Florida, we also welcomed 75 million visitors last year.

Now the pandemic has revealed the soft underbelly of the state budget. The significance of the loss of sales tax revenues has always shown in our state budget when Florida’s economy dips. The tremendous coronavirus impact in the lost revenue from the five counties that generally produce the most dollars may approach twice as much as the federal $4.6 billion CARES emergency stimulus to the state.

It is time to plan an equitable remedy. This highly disruptive period provides a chance to figure out how we should fund Florida, including the distribution of sales-tax revenue funds around our state.

For instance, what if the state replaced that lost revenue by raising the state sales tax to 7 cents — the first increase in over three decades? For $10 spent, the tax increases a dime. At this same time, the state would then give its 67 counties 1 cent above the current half-cent to rebuild their virus-devastated economies and enhance and maintain their communities for better futures?

Tourists statewide pay somewhere north of 20 percent of the tax. In Orange County, tourists pay roughly 50 percent, thereby providing the argument for fairer revenue sharing in the counties where tourism produces the most impacts. These counties are starved for revenues to offset these impacts.

Most people think they have no power to change the world. But Orange and four other big counties mean the world to Florida’s coffers, and all counties deserve a better deal from taxes collected in their jurisdictions.

Florida is known as a haven for low taxes. This proposed change is no deal-breaker. Businesses won’t leave, and with enhanced, prosperous communities, more and higherpaying companies will come, further diversifying our economy. Visitors will find a better Florida, with no need for an increased bed tax.

It’s time for sensible, nonpartisan solutions.