Not one penny has been collected yet from the second extension of the voter-approved 1% sales tax, and already the county is estimating its collection projection is $253 million in the hole.
The shortage is due to two factors: current economic conditions and interest on bonds for fast-tracked projects.
The county attributes a shortfall of $168 million to reduced consumer spending. And, because it created bonds to begin projects, such as the Honore Avenue extension and Fruitville Road improvements, before the surtax was collected, the county created a further shortfall of $85 million.
Dave Bullock, deputy county administrator, said the voter-approved projects were designed to put people to work and that the shortfall will be corrected during the surtax’s 15-year run.
To make up for the $253 million shortage, the county is moving back the funding of many projects that will be paid with sales-tax dollars (see chart). The hope is that the economy will improve and the resulting increase in sales-tax revenue will pay on the back end of the surtax.
“We’re taking a pessimistic view on growth,” Bullock said. “Growth is essentially flat for the next five years.”
A new forecast expects revenue growth of just 1.5% over the next five years. After 2015, the county expects growth of 4% per year. During the 10 years that the first extension of the surtax was in place, revenue grew at an average of 7% per year.
Projects that are associated with public safety, such as the new judicial center and detention facility, may now be funded with a general-obligation bond, which would require a ballot referendum.
If the county decides to go that route, voters could decide on them in the November 2010 election.
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