County Considering Sales Tax Hike To Catch Up On Infrastructure

Palm Beach County officials are discussing a possible half-cent sales tax increase or bond issue, and that was a key topic of conversation at a Palm Beach County League of Cities board meeting held Wednesday, Sept. 30.

At the meeting, Palm Beach County Administrator Verdenia Baker discussed the need for a new revenue stream.

At the Thursday, Oct. 1 meeting of the Royal Palm Beach Village Council, Councilman Jeff Hmara, who sits on the League of Cities board, reported on the presentation.

The Palm Beach County Commission is considering a sales-tax increase referendum in November 2016 from 6 percent to 6.5 percent. A similar increase was contemplated last year, but the idea was discarded after pushback from business leaders.

“It’s a topic that’s going to become more and more of greater interest as we get closer to it,” Hmara said of the possible sales tax increase. “The reason for it is the backlog in the infrastructure work, maintenance, repair and replacement over the period of time from 2008. The total numbers that have been estimated being required to catch up are between $700 million and $800 million. That’s a lot of money.”

He said that Baker discussed a variety of ways to generate the money.

“The one that seems to make the most sense under all considerations is the possibility of a sunset-limited sales tax increase,” Hmara said. “A lot of people say once you give the government more money, they tend to continue, and the idea of terminating an increase doesn’t happen.”

But Hmara pointed out that several years ago, the county did return to a 6 percent sales tax after several years of a sunset-limited 6.5 percent sales tax.

“We’ve demonstrated that it can happen, so the argument is that it is doable,” Hmara said. “I will tell you, though, that one of the things that got my attention was talking about a 10-year period. The longer you have this in place, the more accustomed the government gets to having that money coming in.”

According to Hmara, League of Cities representatives suggested to Baker that the sales tax should be for a shorter period. “She seemed to be open to that, and she was looking for feedback,” he said.

Hmara said the board spent close to an hour and a half with Baker discussing options.

“Having a seat at the table is really important,” he said, adding that the county plans to survey voters to get their reaction to a sales-tax increase.

Councilman Fred Pinto pointed out that county staff proposed a half-cent sales tax increase about a year and a half ago that did not gain traction. “We’ll see what happens,” Pinto said.

Palm Beach County League of Cities Chair Richard Radcliffe said his board did not make a commitment for or against a sales tax increase, but only to pursue options, which could include an ad valorem tax increase or a bond issue.

“The board agreed to follow it and watch until it coagulates,” Radcliffe told the Town-Crier on Tuesday, explaining that Baker’s presentation was more informational than promotional.

If a sales tax were approved, the cities would also be beneficiaries, in probably a 60/40 split, but Radcliffe said that not all of the cities are in as much need to catch up on infrastructure.

“The county is way behind on roads, but not all the cities are behind,” he said.