- May 1, 2024
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The half-cent sales tax is set to expire Dec. 31. It costs the average resident about $50 annually.
The countywide half-cent sales tax expires in about nine months, and Palm Coast officials discussed on Tuesday possible ways to generate infrastructure money, including continuing the half-cent sales tax, implementing a public service utility tax or establishing a utility franchise fee.
The half-cent sales tax has been in place since 2003. It was approved in 2002 with 62% of Flagler County voters in favor.
For the past 10 years, the city has used its portion of the money to resurface approximately 50 miles of road per year. By the time the sales tax expires Dec. 31, the city will have collected approximately $23.4 million.
The money must be used on infrastructure improvements, according to City Manager Jim Landon. Palm Coast officials hope to spend it on projects other than resurfacing roads, including stormwater and sidewalks/multiuse paths.
Of the sales tax collected countywide, Palm Coast gets 64%, or about $2.6 million per year. The county receives 29%, or about $1.2 million. Earlier this month, County Administrator Craig Coffey suggested at a County Commission workshop that the county should consider distributing the funds according to the Department of Revenue’s default distribution, which gives the county 45% of the tax and Palm Coast about 50%.
City officials don’t think the state’s default distribution is fair, however, and according to a presentation at the March 27 workshop, the city has three options.
The city could renew the half-cent sales tax with the interlocal agreement, but it would have to be reached by noon June 5 in order to make it on the ballot. It is estimated to produce about $2.6 million per year, or $26 million over 10 years. Typical cost to a residential household is between $48 and $54 annually.
A public service utility tax could also be implemented. The tax is general revenue, meaning the City Council can use the money on any project related to infrastructure. The tax is based on usage of electricity, natural gas, bottled gas, fuel oil and/or water and can be levied up to 10%. This would need to be approved by a City Council ordinance by Aug. 31 to take effect by Jan. 1, 2013. Flagler Beach and Bunnell both have a public service tax in place.
If a tax of 6.5% were to be levied (the maximum allowed is 10%), the monthly cost per household would be $4.25 per month, or $51 per year.
The third option would be a franchise fee. This, too, is general revenue and unrestricted. It is charged on the entire electric utility bill and is typically set at 6%. City officials would consider a 4% fee, which would translate to the same $51 per year. It would have to be approved by Aug. 31 to take effect Jan. 1, 2013.
Palm Coast Mayor Jon Netts said Tuesday that a decision shouldn’t be made until the City Council speaks directly with the County Commissioners at an upcoming meeting.
“I am not comfortable with us assuming what the county position is based on (Coffey’s statements),” Netts said.
The meeting between the 10 elected officials will also discuss transportation impact fees.
