By Faith Ross
The new buzzword from candidates running for local, public office seems to be “new revenue streams.” To understand why these words have become important, voters may want to know how the State of Florida impacts municipal revenue streams.
State statutes neglect to support the economic sustainability of municipalities. By law, local tax revenues are placed solely in the hands of county governments for disbursement. And by state law, there is no mandate to send any county property tax funds (paid by cities) back to municipalities for infrastructure or services. As a result, municipalities resort to funding their own police and fire services along with other essential services. Roughly 50% of the budget of Fernandina Beach is dedicated to law enforcement and fire and rescue services. As a tourist town, almost 20% of the city’s budget is allocated to Parks and Recreation. Case in point, Nassau County government funds four sports complexes in other towns in Nassau County. Nassau County sends no recreation monies to the City of Fernandina Beach. Nassau County government is permitted, by state law, to totally ignore any municipality that funds it.
The Tourism Bed Tax is another example of the legislature allowing total disregard for municipal economic development. Though the tourism council freely admits that roughly half of the county’s bed tax revenue is derived from the City of Fernandina Beach, only county government is permitted to decide where and how the bed tax funds will be spent. There is no mandate from the state to disburse the funds equitably. The county can keep all of the funds.
The state also dictates that state sales tax revenue be distributed to municipalities by population. Much of the county’s sales tax revenue is generated by Fernandina Beach. Fernandina’s population of 13,000 is dwarfed by the county’s burgeoning population of over 96,600. As a result, the county receives roughly half of the city’s sales tax.
To further the case that municipal economic development is not supported by Nassau County government, in April, Nassau County completed a draft, beach, parking study. It recommended the creation of a county-wide parking authority to oversee all of the island’s nonresident, paid beach parking. The new authority would collect all parking revenue from all beaches (including city beaches). There was no mention of how the county would distribute the proceeds, if any, to Fernandina for the use of city-owned beach parking.
How do other municipalities compensate for the lack of support from their counties for infrastructure and services necessary for economic development? Many Florida municipalities use county interlocal agreements. Lake County promotes economic development with an interlocal agreement that equitably funds recreation, stormwater management, and transportation among other items with 14 municipalities within its jurisdiction.
Interlocal agreements are generated by a need for cost sharing and generally brought about with leverage. For instance, Fernandina may have some leverage with the county’s South Amelia Island Shore Stabilization Association (SAISSA). The SAISSA funds the sand renourishment of south county beaches. South county beaches seldom need sand renourishment; the Navy-supplied sand on the city’s beaches flows freely southward. However, presently, an additional agreement between Fernandina and the Army Corps of Engineers for additional sand (if needed) keeps the city from implementing nonresident, paid beach parking. Dropping the city’s Army Corps agreement would shift the cost of replacing south county beach sands to the county and SAISSA. Fernandina would then be free to join the county in collecting nonresident, paid beach parking revenue.
Cost sharing economic development can actually mean “sharing” when tourism and nonresident recreation are jointly funded. Resisting the temptation to build, repair, or maintain city facilities mostly utilized by nonresidents could bring county government and tourism to a possible agreement. For example, neither the Tourism Council nor the county have been asked to cost share the badly needed structural repair costs of the Island’s lighthouse (an icon for island tourism). A proposed playground at Simmons Park is 80% surrounded by nonresidents. Over 95% of the participants utilizing Fernandina’s lighted, adult softball complex at the airport are nonresidents. Offering to cost share rather than defund may bring interlocal agreements into existence.
Hopefully, in the future, candidates interested in gaining new sources of revenue, will include the words “Interlocal Agreement,” “leverage” into the discussion of future cooperation with tourism and county government. Interlocal Agreements between Nassau County or the Tourist Development Council to support or promote any municipality’s economic growth or sustainability will likely only be accomplished with the assistance of a very large carrot and a massive stick.