The Real Poop on the Infrastructure Sales Tax

At one time, Monroe County introduced the notion of “donor” and “recipient” communities.  They put out a report asserting that Key Largo was a “recipient” community.  Here’s a link to a newspaper article about it.  The report was so poorly done, I threw it away.  I regret that now because I would like to share it with you.  The county did not provide the information needed to back up their assertions.  There was no way to know where they got their numbers, and there was no way to follow their logic or check their conclusions.

When it comes to the infrastructure sales tax, the idea that Key Largo is a “recipient” community is demonstrably false.  And I will provide the information needed to back up that assertion.  I’ll tell you where you can find that information, too.

The chart below compares the amount of infrastructure tax generated to the amount of sales tax distributed and/or spent.  The Lower and Middle Keys roughly break even.  What they receive each year is within a $1 million of what they generate each year.  The Upper Keys is a donor community to the tune of $3 million per year on average.  Being a donor community in and of itself isn’t necessarily bad.  The real problem here is that in addition to being a donor community, the Upper Keys also receives a lower level of service.  You pay more and get less.

SalesTax_Chart

For those of you who are interested in where I got the data, please read on.

Thanks to the Florida Department of Revenue (DoR), it is easy to see where in the Keys all this money is collected.  They keep this data by zip code and it is available upon request.  Here’s a table I made using that data:  SalesTaxGenerated_byZipcode  The zip codes don’t always break nicely over the areas of interest.  Where that was an issue, I took information from the Monroe County Property Appraisers website to figure out the  proportion of sales tax-producing properties in a given area.  For instance, zip code 33070 (Tavernier) overlaps the unincorporated area of Key Largo and the Village of Islamorada.  About half the commercial properties are located in the Village and the other half are located in Key Largo so I split that one 50/50.

The Florida Department of Financial Services has a database that makes it simple to see how the infrastructure sales tax is distributed to counties and municipalities.  Its called Loger.  In Loger the infrastructure sales tax is classified as a discretionary sales surtax.  I ran a report for each entity in the Keys and then spot checked those numbers against the Comprehensive Annual Financial Reports (CAFR).  Here is a table I put together using that information:  SalesTax_Distribution

Monroe County has a spreadsheet where they keep track of all spending on infrastructure projects.  So its easy to see where the money goes.  They’ll provide it on request, but you have to know it exists.  Here’s the latest I’ve got:  Project History (1)

When county spending is combined with distributions to the municipalities it gives a good idea of how much sales tax is spent in each area of the Keys.  For example, if you look at the project history spreadsheet, about $258 million will be spent on infrastructure projects in the Lower Keys.  That works out to about $8.6 million per year.  Key West is the only incorporated area in the Lower Keys.  According to the Sales Tax Distribution, Key West receives about $5.5 million per year on average.  So between county spending and direct distributions to Key West, the Lower Keys receive about $14.1 million per year from the infrastructure sales tax.

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