Gov. Ron DeSantis to Hillsborough: Refund sales tax. No spending on transit

Gov. Ron DeSantis wants the state to refund the voided Hillsborough County transportation sales tax to people who paid it and spend the rest on roads and bridges, but not mass transit.

The directive is included in the governor’s proposed budget, released last week, and calls for the Department of Revenue to work with a third-party claims administrator to set up the refund procedures for nearly $570 million.

If the Legislature agrees, public requests for refunds would be due by Feb. 29, 2024, and be paid by April 1, 2024.

The refund proposal is a new twist in the sales tax saga that just three weeks ago saw Hillsborough County commissioners compiling a list of transportation projects on which to spend their share of the escrowed dollars.

Hillsborough County Commission chairperson Ken Hagan said he was grateful the governor provided a refund process.

“Our residents deserve that,” he said.

However, he said he also was hopeful substantial money would be available afterward to finance shovel-ready transportation projects in the county.

The county collected the voter-approved 1% sales tax from Jan. 1, 2019, until the Florida Supreme Court ruled it illegal in February 2021 after a legal challenge from then-Hillsborough Commissioner Stacy White.

After the state Supreme Court decision, the commission voted to refund the escrowed proceeds. However, a circuit court judge rejected the county’s plan to allow a panel of three retired judges to review and administer the payments. Instead, Circuit Court Judge Rex M. Barbas said the Legislature should decide the fate of the unspent money.

Under the governor’s proposal, the third-party administrator would be allowed to spend up to 2% of the tax proceeds managing the refunds. That equates to approximately $11.4 million of the nearly $570 million sitting in reserves. The Department of Revenue can spend up to 1% ($5.7 million) for its administrative duties.

The Department of Revenue would transfer whatever remains on April 1, 2024, to the state Department of Transportation, which then would detail a project list by June 1. DeSantis made clear what would be disallowed.

“A list of transportation infrastructure projects may only include the construction of roads, bridges, road resurfacing, and associated infrastructure development and related planning and development costs. The department may not use funds for any public transit programs or fixed capital outlay project related to a public transit system,” according to the governor’s proposed budget.

Exactly how the refund would work and how much would money be left afterward for transportation is not yet known.

“The process for receiving funds, and for which projects, will unfold as decisions are issued from the Legislature and governor’s office,” Vik Bhide, Tampa’s mobility director, wrote Friday in a draft memorandum scheduled to be delivered to Tampa City Council members.

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Hillsborough County currently is devising its proposed list of projects to send to the state. The initial list, presented to commissioners during a Jan. 25 workshop, was topped by $130 million to pave 680 miles of roads.

Commissioner Pat Kemp had said she wanted $25 million included for a maintenance facility for the Hillsborough Transit Authority, but the governor’s mass transit prohibition likely makes that moot.

Likewise, the city of Tampa’s earlier transportation priorities included $66 million for extending the TECO Streetcar line and a separate transit project to link the University of South Florida to downtown. Now, the city’s list focuses exclusively on a $150 million package of resurfacing streets, replacing bridges, adding sidewalks and making intersections safer.

Voters approved the tax referendum by 57% to 43% in November 2018. Under that plan, 45% of the tax money was earmarked for transit. White successfully challenged the legality of the tax contending the spending allocations were predetermined by the ballot, rather than being set by elected officials. Last month, a Leon County Circuit Court judge rejected a separate class-action lawsuit over the tax.