The Penny Sales Tax
Why You Should Vote No
The Lake County Board of County Commissioners recently voted to hold a special election this November for the renewal of the one-cent local sales tax option that expires December 31, 2017.
If passed, we will pay a 7% tax on all purchases up to $5,000, instead of the regular state sales tax of 6%—a 16% increase, for another 15 years.
The money from the Penny Sales Tax is split into thirds between Lake County government, the School District, and local incorporated cities. According to Lake County’s figures, they will receive $74.30 million within the next 5 years from the county’s 1/3 share. If that estimate is correct, that is a total of $782.7 million that will be taken out of taxpayers’ pockets over the next 15 years.
You should vote NO for this tax because:
- There is no clearly defined use for the $782.7 million this tax will generate. You do not want to give a blank check to Commissioner Jimmy Conner and the other politicians.
- There is no real, independent oversight of the tax revenue being spent. Without accountability, this $782.7 million will be used again to generate political contributions and political influence.
- The tax proposal does not provide a positive economic impact for the County. There are no guarantees that local companies and workers will get a fair opportunity at getting any work generated by the tax. Your money will be used once again to hire out-of-county workers and companies.
- Enough is enough! Lake County has multiple funding sources on most of the items the politician’s cite this Penny Sales Tax will fund. At what point do they have enough of your money?
- The Lake County Board of County Commissioners is trying to suppress the vote of seniors and the poor by quickly scheduling an off-year election at a huge expense to Lake County taxpayers.
- According to Emogene W. Stegall Supervisor of Elections Office, this special election to suppress the vote will cost Lake County Taxpayers $440,000!
The main issue we have with this Penny Sales Tax proposal is that the ordinance is structured to allow millions of tax dollars to be used as a slush fund for Lake County government. There are no controls or guidelines in place to prevent officials from doing as they please with our money. The tax was originally adopted to address very specific infrastructure issues. It has since been wasted and abused due to government overspending. Over the last 15 years, the tax usage was not even properly audited. The money was not spent on voter-approved projects because of irresponsible and weak oversight.
To make matters worse, much of the tax revenue raised in Lake County from the Penny Sales Tax was paid to out-of-county vendors, contractors, and subcontractors as a reward for political contributions. Local providers were locked out of bidding on many of the projects because of the way the Request for Bids were specifically worded against them. Consider this point, from 2009-2012, during the worst of the Great Recession, when unemployment and misery was at its worst for Lake County, the School Board awarded $119.6 million in general construction contracts—not even one contractor was from Lake County. In fact, the School Board hired a contractor from Rhode Island at $2.4 million to install air conditioning at a Eustis school when there were local companies and workers available to do the work. While hiring local cannot be a mandate, there should have been very specific targets and verifiable efforts to hire local companies and workers.
Here is the truth you should know about the Lake County Penny Sales Tax that the politicians won’t tell you:
1. Why does Lake County have a Penny Sales Tax?
Lake County has a large number of senior citizens and poor people who do not pay property taxes. Politicians use the Penny Sales Tax specifically to make seniors and poor people pay their “fair share.” The tax was originally created in 1988 and renewed in 2001 to include schools. Officials used fear and predictions of economic Armageddon each time to get it passed.
2. Why is Lake County holding and paying for a Special Election on November 3, 2015 when it could have included the proposal in the Presidential Primary Election, just four months later on March 15, 2016?
The current Penny Sales Tax does not expire until December 31, 2017. Lake County could save money and put it on the ballot in 2016. However, the politicians want to hold an early off-year election because they know they have a better chance of winning. If it were put to a vote in the 2016 presidential election year, voter turnout would be high and voters would vote against the tax. By holding it early, they are counting on a suppressed voter turnout at the polls. In other words, they hope to keep you away from the polls and muster enough political friends to impose the tax on the poor and seniors citizens.
3. The Lake County politicians who are promoting this tax say, “The penny funds our infrastructure and road projects, fire and ambulance purchases, school technology and many other critical Lake County needs. It is likely that your business benefits from some of these projects, as well.” Is this true? Does the Penny Sales Tax fund all of this?
No, it is not true. This is a complete exaggeration from a desperate group of politicians. They will launch a campaign for this tax to pull every heart and fear string they can. In addition, local businesses have not received any benefits. Just ask a local vendor, contractor, or subcontractor that bid on Lake County government and school projects—most of them were locked out.
Here are the real facts:
- Basic property taxes were established in the beginning to fund all the needs of Lake County and its citizens. Thanks to Lake County Commission Chairman Jimmy Conner, we all got nailed for a huge 13.8% increase in those taxes last year. They used the same talking points to push that increase through.
- Lake County already gets 1/2 cent of the sales tax generated in the county from Florida’s 6-cent sales tax.
- For roads, in addition to regular property taxes, Lake County roads are funded by a 7-cent gas tax (which was just renewed for 30 years by the Lake County Board of County Commissioners in January) and by a transportation impact fee adopted last year, which is the highest impact fee in Central Florida. A new homebuyer pays $3,194 in transportation impact fees in South Lake County, and new businesses pay as much as ten times more than that.
- Lake County schools are funded by regular property taxes at a 4.998 millage rate and the Lake County School District has instituted a special discretionary and capital improvement assessment of 2.2480 mills on your property taxes. On top of that, at $7,719, the Lake County School Board instituted the highest school impact fee in Central Florida.
- For fire protection, in addition to regular property taxes, Lake County voters pay a special fire assessment on their property taxes at a 0.4704 millage rate, which was a 46.0% increase enacted by the Lake County Commission in 2014. Plus, there is a $390 fire impact fee for every new home built and a considerably higher fee for every new business built.
- In addition to regular property taxes, Lake County voters pay a special ambulance assessment on their property taxes at a 0.4629 millage rate, which was increased by 20.1% by the Lake County Commission in 2014.
- For libraries, in addition to regular property taxes, new homebuyers in Lake County pay $191 library impact fees.
- In 2004, the citizens of Lake County voted for a one-third millage rate that was bonded to purchase $36 million in environmental lands. It is listed on your Lake County Property Tax bill as “Environmental Land Purchase.” These purchases have been funded.
- In addition to Lake County taxes, many of the local cities charge taxpayers additional taxes and impact fees for parks, water, sewer, police, and EMS/Fire.
The bottom line…everything the Lake County politicians claim this Penny Sales Tax is funding already has many other funding sources. Those sources were also enacted under the same ploy of “the sky is falling”. In many cases, funding for fire and other rescue areas are being diverted to non-essential items, thus depriving our first responders.
If the Penny Sales Tax is truly needed, what do we support?
- Schedule the renewal of the one-cent local sales tax option for vote in 2016 when more people are heading to the polls so voters can have an honest debate. Don’t allow the politicians to suppress the vote by having an off-year special election.
- Require revenues be used for very narrowly-defined purposes to stop the shell game the politicians are playing with our money. In 2014, when increased property taxes and impact fees were implemented, the politicians said roads and schools were Lake County’s top two priorities. Therefore, Lake County’s portion of the Penny Sales Tax should only be used for road construction; the School Board’s portion should only be used for new student stations; and the cities’ portion should only be used for roads and utility projects.
- Mandate that no part of the money be bonded and all government entities must use the Penny Sales Tax funds to pay as they go. Debt is crushing the Lake County School District because of ill-advised bonding of the current Penny Sales Tax.
- Provide that no part of the Penny Sales Tax be used to pay down old debt.
- Take the control of the tax revenue out of the politicians’ hands. The $782.7 million dollars expected to be collected over the next 15 years is a lot of tax money, and should be closely audited and monitored to ensure the dollars are being spent properly. An elected (not appointed) Penny Sales Tax Board representing each district should be set up to handle the disbursement of the Penny Sales Tax revenues to ensure the money is being appropriated correctly and to ensure there are no malfeasants. As written, this ordinance allows no real independent oversight.
- Support local vendor participation. As written, this ordinance does not have any provisions promoting the hiring of local companies and workers for projects funded by the Penny Sales Tax revenue. An 80% target for local companies and workers should be established. Prior to project funding, local government entities should be required to prove to the Penny Sales Tax Board that local providers were given a fair opportunity to bid for work. Targets are not mandates, but this would ensure that local government is committed to local participation.
- The Penny Sales Tax Board would not judge the merit of a project but only approve funding based on the criteria as approved by the voters in regards to the narrow scope of projects and to ensure local workers and companies were given a fair opportunity to bid.
We encourage you to VOTE NO to the proposed Penny Sales Tax ordinance on the November 3, 2015 ballot.
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