Thursday, January 18, 2018
Editorials

Editorial: Caution needed on combined sales tax pitch

Dianne Bonfield is right to be skeptical. The retiring Hernando School Board member correctly wonders why the school district, which is seeking renewal of a 10-year half-cent-on-the-dollar sales tax to maintain and modernize classrooms, should consider hitching its pitch to a new push by Hernando County government to try to get its own discretionary half-penny tax in a November referendum.

She recently asked County Administrator Len Sossamon and a roomful of Hernando's business elite pushing a Penny for Progress sales tax pitch: What's our benefit?

Good question. The supporters of a combined penny pitch tout a joint campaign with a political action committee raising and spending up to $120,000 to persuade voters to invest in their county. What they don't say is that the county effort needs the political pull of the school district. Ten years ago, voters approved the half-cent sales tax for school construction, while rejecting the same half-cent tax for county capital spending.

Combining the two sales tax plans into a single ballot question is a dangerous gamble for the School Board. The district is confronting a $283 million capital and debt service plan that already lost one of its key financial components — an impact fee assessed on new single-family home construction. In March, the Hernando County Commission, bowing to the politically influential building industry, rejected the school district's request for a new fee of almost $7,000 per house that had been projected to raise $61 million. Losing the sales tax renewal in the November referendum would leave another $78 million hole in the school's construction needs.

The district should question the wisdom of becoming partners with county commissioners who have done a poor job as fiscal stewards of past voter-approved taxes. In 2011, commissioners suspended a property tax for preserving environmental lands, authorized by voters in 1988, and instead used the tax proceeds to pay mosquito-control costs, previously financed in the general fund.

Voters confirmed the maneuver in a 2012 nonbinding referendum that continued to cap the special tax rate at 10 cents per $1,000 of assessed property value. But earlier this month, commissioners again ignored the will of the electorate and eliminated that cap. It sets the stage for a property tax increase absent voter input.

Even worse, it was clear in the debate that two commissioners, Diane Rowden and Nick Nicholson, don't understand the intricacies of who pays and who is exempt from property taxes. Commissioners that out of touch with taxation and budget issues are going to have a hard time convincing the public that they should be in charge of new sales tax revenue.

There are many unanswered questions surrounding the county's sales tax proposal, which could raise $78 million. How much money will be shared with the city of Brooksville? Logically, the city, representing about 4.4 percent of the county's population, should receive 4.4 percent of the half-cent earmarked for county projects, or $3.3 million over 10 years.

How broad will the county's spending be? Sossamon already talked about dedicating 15 percent toward economic development and suggested 10 projects totaling $20 million to commissioners Tuesday. Sossamon also prepared a list of 16 road projects costing more than $96 million, nearly half of which is earmarked toward adding lanes to two roads, Powell Road and Barclay Avenue. If you're counting, that's $116 million in spending, or $38 million more than the tax is projected to raise for the county. So, expect some immediate pruning.

Hernando School Board members were correct to ask for more details, which are supposed to be coming in June. But, they shouldn't allow themselves to be overwhelmed by the promise of progress or the promise of political help passing the ballot measure.

They should scrutinize the county's spending plan thoroughly before deciding on a joint campaign and single ballot question. The School Board should remain open to allowing two separate tax questions to be judged on their individual merits.

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