Monday, May 22, 2017

Should twin itty-bitty cities share in bed tax? (Steven Cottrell column, St. Augustine Record)

St. Johns County can increase the bed tax and use it for infrastructure. Enough inane advertising. Enough waste, fraud and abuse, misfeasance, malfeasance, nonfeasance, flummery, dupery and nincompoopery from St. Johns County and the twin itty-bitty cities of St. Augustine and St. Augustine Beach. Our governments lack a welcoming spirit. They must act like customer service organizations instead of corrupt collections of political patronage hacks and developer coddling goofiness. Without a customer service orientation, without an Inspector General, without an Ombuds, without a whistleblower protection policy, our local governments don't deserve ANY tax increases. The whole world is watching.

Posted May 22, 2017 12:02 am
By STEVE COTTRELL Public Occurrences
STEVE COTTRELL: Cities need a slice of the bed tax pie

When city, county and state government budgets get tight, two options are usually moved to the bureaucratic front burners — raise taxes or reduce services. (At the federal level, of course, they merely print more greenbacks).

I believe there’s a third option for communities like St. Augustine and St. Augustine Beach, and it doesn’t require a new tax or reduced city services. It merely requires a new formula for distributing an existing tax.

When Transient Occupancy Tax (often called bed tax) was introduced to U. S. travelers after World War II, one of its intended purposes was to help fund infrastructure costs. Tourists were having an impact on city streets and services, but there was no mechanism other than sales tax to help pay for the impacts.

So in 1946, beginning in New York City and soon spreading throughout the nation, lodging guests began paying a small tax on their room rate.

In the early years of bed tax collection, many communities placed the new revenue in their general fund — a financial black hole into which money from a combination of sources is sucked in and commingled. Later, restrictions were often put on use of the money.

In Florida, laws governing distribution of a Tourist Development Tax were established after Walt Disney World began drawing tens of millions of visitors a year — most of whom stayed at lodging facilities in and around Orlando. When a 2 percent bed tax was instituted, a ton of dough began filling Orange County coffers.

Here in St. Johns County, the Tourist Development Council was recognized by the county commission in 1986 as the designated bed tax recipient.

Some Florida counties are allowed to use a portion of bed tax revenue for beach rehabilitation, venue construction and some other tourist-related exceptions. State law, however, requires that the expenditures enhance tourism.

But what about the impact tourists have on essential city services and infrastructure?

How many tourists require police or fire departments assistance? How many are pulled from the ocean by lifeguards then attended to by local emergency medical personnel? How many potholes grow bigger by the day as tourists drive over them?

And why can’t a city use a portion of bed tax collected inside its city limits to promote activities the city deems appropriate, rather than depending on year-to-year inclinations of the Tourist Development Council? Well, because that’s the law in Florida. That’s why.

Maybe — just maybe — if cities like St. Augustine and St. Augustine Beach made a reasoned pitch to our state representatives, and gained support from the Florida League of Cities, a simple sentence could someday be added to the relevant Florida statute.

Something like: “Twenty-five percent of all Tourist Development Tax collected from within the incorporated limits of a municipality shall be returned to that municipality to accommodate marketing priorities as determined by the city, as well as help offset tourist-related infrastructure and resource impacts.”

How much would that mean for St. Augustine? Not sure, but yearly bed tax collection in St. Johns County is about $10 million — and steadily growing. Yes, a lot of that money is collected outside the city limits, but millions are collected from lodging businesses in the city. St. Augustine Beach generates a lot of bed tax revenue as well.

Redistribution of bed tax shouldn’t make any difference to local lodging owners, or to tourists, because the tax rate would remain the same. Local government entities would receive a reasonable share to help defray costly infrastructure and resource impacts, and the TDC would continue to receive several million dollars a year for its marketing effort.

I am a former small-town Chamber of Commerce president who spent decades working to increase tourism through costly, creative marketing. But while I was doing that, I recognized that a portion of the bed tax was needed to help offset infrastructure and city resource impacts resulting from tourism.

Wish decision-makers in Tallahassee felt the same way.

Steve Cottrell can be contacted at

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