After years of on-again/off-again talk about increasing the local sales tax to pay for transportation and other infrastructure projects, the Volusia County Council has set May 21 as the date for a countywide referendum.
In what will be a first for the county, the referendum on increasing the sales tax from 6.5 percent to 7 percent will be a vote-by-mail election. It will cost the county approximately $500,000.
“I’m in total support of this, and I’ll be paying it, too,” Council Member Billie Wheeler said Feb. 5, just before she and her colleagues set the election date.
If approved by a majority of the county’s voters, the tax will yield approximately $40 million in new revenue each year for the next 20 years. It would go into effect Jan. 1, 2020.
Volusia County’s sales tax currently includes the state’s general sales tax of 6 percent and a voter-approved half-cent sales tax for school construction. An additional half-cent for infrastructure would put Volusia’s total sales tax at 7 percent, the same as neighboring Seminole County.
Supporters of the add-on sales tax say about 40 percent of the tax — perhaps as much as $16 million a year — will be paid by tourists and visitors.
The cash is to be used for roads, streets, bridges and sidewalks, as well as water-quality projects and stormwater control. The proceeds are not to be used to fund the county’s Votran bus system or SunRail.
County government is to receive about 48 percent of the revenues, and the other 52 percent will be divided among Volusia’s 16 cities.
If the tax passes, a citizens-oversight committee will be formed to ensure transparency in the expenditures and adherence to the promises made to voters.
County Council members defend the sales tax as essential to meeting the needs of growth and fixing aging and failing roads.
Proponents say the extra tax is essential, especially for paying for transportation needs, as other revenue streams vanish.
“State funding, federal funding — it’s going away,” Council Member Ben Johnson said. Unless the tax is levied, he added, “We’re going to leave our children with crumbling roads.”
The sales-tax referendum comes as transportation planners find themselves dealing with flat revenues —about $22 million a year — in gasoline taxes, as people shift to more fuel-efficient cars.
While the county has recently increased impact fees for roads, the new revenues may be only about $13 million annually, or enough to build about 2 or 3 miles of new thoroughfares. Under state law, impact fees may be used only to construct new roads or lanes, and not to repair or maintain existing ones.
The costs of road construction are rising, too, as the national economic recovery creates more demand for steel, concrete and asphalt.
“The costs continue to increase,” Wheeler said. “These are dire needs.”
The rising costs make it difficult to predict the final costs of projects.
“The alternative we’ve looked at is raising property taxes by 30 percent,” County Chair Ed Kelley said.
The County Council approved the ordinance setting the referendum with a 6-1 vote. Council Member Heather Post was the sole dissenter.
“I don’t agree with it,” Post said, when asked why she had voted against the measure.
“All we’re saying is, let the citizens decide,” Council Member Deborah Denys said.