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Sales-Tax Spending Speeds Up

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By ANTHONY McCARTNEY, The Tampa Tribune

Published: October 12, 2007

TAMPA - The plan was simple: pass a half-cent sales tax, and for 30 years Hillsborough County residents would reap the benefit.

Less than a dozen years after voters approved the Community Investment Tax, however, Hillsborough County has spent most of the $2.4 billion it expects to collect over the levy's lifetime.

That's because two years ago, county commissioners started spending CIT money at an accelerated pace, breaking its policy of approving projects only in five-year increments.

The result? Officials estimate there's only about $250 million left to spend from a tax that doesn't expire until 2026.

Signs of the tax's benefits are everywhere. It's fueled a government building boom that's paved hundreds of miles of roads, erected a jail and dozens of schools, fire stations and libraries, as well as Raymond James Stadium.

To make it all happen, Hillsborough and other governments have borrowed against money they don't yet have.

'Originally, the concept was 'pay as you go,'' said Joe Chillura, who as a county commissioner proposed the tax and wrote some of its language. He said the county has relied too much in recent years on borrowing money to pay for future projects.

Because the county has obligated most of the money from the half-cent tax, other projects might not be built or other sources of funding will have to be found.

County commissioners defend their spending, saying most of the purchases were necessary and can be built more cheaply today than later. Tapping the Community Investment Tax has allowed commissioners to build some projects - such as stormwater upgrades - without raising other taxes.

'I think that was a decision born out of necessity because of public outcry,' said Commissioner Brian Blair, who with then-Commissioner Ronda Storms championed spending three years of CIT money ahead of schedule on road and stormwater improvements.

'All in all, I think it's been well used,' Commissioner Mark Sharpe agreed.

But the tax that Chillura once said could 'solve all the community's woes' is showing its limitations, and it's not even 12 years old.

'It's not a bottomless well,' Chillura said.

Stadium Was Selling Point

Voters went to the polls in record numbers in September 1996. Fifty-three percent of them said yes to the Community Investment Tax, which promised to make streets safer, neighborhoods better and keep Sundays busy.

Two previous referendums to help police and schools were drubbed by voters. The CIT, though, had another selling point - it would build a new stadium for the Tampa Bay Buccaneers, ensuring the team stayed in Tampa.

Less than $300 million of the $4.7 billion the tax is expected to generate by 2026 goes to the stadium. Debt on the $168 million stadium is paid first, then 25 percent of what remains goes to schools.

Local governments - Hillsborough and the cities of Tampa, Temple Terrace and Plant City - divvy up the rest based on population. The county's share is currently about 72 percent per year.

Hillsborough is not alone in spending its CIT earnings before it has the money.

The school district has borrowed against most of its expected $1.2 billion share, allowing it to complete or begin construction on 46 facilities in the tax's first 10 years.

Tampa also has borrowed against the tax's future earnings for parks and stormwater projects. In general, the city allocates CIT dollars in five-year phases.

If local governments hadn't spent the money quickly, schoolchildren could be facing double sessions and the city couldn't have afforded to expand its police force, former Tampa Mayor Dick Greco said.

'If you want to name one thing that helped the city the most, it would be the Community Investment Tax,' he said.

There are still a number of residents and officials who say they are counting on the special tax to pay for their projects, such as adding 768 beds to the Falkenburg Road Jail.

The jail's construction was made possible with the CIT, but Col. David Parrish, who oversees the county's jail system, said he's worried about the upcoming scramble for what's left of the money.

'The problem is that you have to get in line for this money,' Parrish said.

Court officials say they'll need a new $120 million criminal courthouse to replace the current one, parts of which will be 64 years old by 2026.

Without CIT dollars, 'Voters would have to approve raising their property taxes to build a courthouse,' Court Administrator Mike Bridenback said.

County Debt Management Director Mike Merrill has assured commissioners there will be enough money to pay for public safety demands, but perhaps not entirely from CIT money. Borrowing from other sources may be needed.

Breaking The Cycle

When the half-cent tax was sold to voters, the pitch was that the money would be spent in five-year cycles.

That philosophy ended two years ago, although a September 2005 meeting didn't begin with commissioners planning to spend CIT money ahead of schedule.

They listened as residents lobbied for certain projects that would be paid for with the tax's estimated earnings through 2013.

It was a busy agenda, with the public and commissioners getting one of their first chances to comment on Championship Park, which Chairman Jim Norman had proposed earlier in the year. The sports complex was vying for $40 million from the tax fund.

Storms, who along with other commissioners listened to several residents ask for stormwater upgrades, had her own proposal. She wanted to spend another two or three years worth of CIT to pay for stormwater and transportation improvements.

The board had months earlier killed, at Blair's urging, a plan to assess residents $300 million over 20 years to pay for the project.

County officials told commissioners Storms' proposal was doable, but the money would be borrowed against taxes collected a decade later.

'The only caveat is to recognize you're talking about money that we won't see for nine years, 10 years and 11 years,' Budget Director Eric Johnson said at the time.

Commissioners unanimously approved Storms' proposal, committing CIT dollars collected from 2014 to 2016.

Among the projects approved that day were several stormwater enhancements for the Palm River area, just east of Tampa near McKay Bay.

'It was money well spent,' said Gary Anzulewicz, president of the Palm River Economic Development Council. The area had been neglected for years, and when the work is done, more development for Palm River will follow, he said.

That will help the CIT grow, he predicted.

Emptying The Account

The last large chunk of county CIT money will take center stage Wednesday, when commissioners hold a public hearing on whether to spend $500 million on transportation improvements.

In August, commissioners sparred over whether to approve the money. Chairman Jim Norman invoked the memory of the stormwater and transportation debate from two years earlier.

'The thing to the voter was we were going to take up five-year plans, and we violated that,' Norman said.

Hagan, who has championed the transportation spending, said Thursday that the improvements are necessary.

It's better to use the CIT money that's left now than raise taxes, Hagan said. If approved, the transportation plan will allocate sales taxes up until about 2020.

Within moments of last week's defeat of Championship Park, commissioners were discussing how to divide the $40 million that would have funded the park.

Blair said he wanted the whole share to go to parks. Other commissioners suggested dividing the money equally between commissioners' districts so the most-needed projects in each area could be accomplished.

There are plenty of candidates. Commissioner Rose Ferlita held up 120 pages of 'unfunded capital projects,' any combination of which could consume the remaining CIT dollars.

Sharpe said he would prefer commissioners take a step back before spending any of it. 'I think there's nothing wrong with holding what's left in reserves.'

He said at some point, officials should consider asking the public to extend the CIT, but not yet.

Overreaching is a common problem of long-term taxes, said Dominic M. Calabro, president of Florida TaxWatch, a nonpartisan government watchdog group.

'There's a tremendous likelihood of overpromising and underdelivering,' he said, noting that the officials who preside over the end of the CIT won't be the same ones who spent it.

Chillura and Norman have decried decisions to give $17 million approved for the Tampa Bay History Center or the $27 million for the Tampa Museum of Art. 'That has had an impact on the amount of monies available,' Chillura said.

'Go back to the original concept,' he said, urging local governments to plan how they spend the remaining money in five-year increments and with significant public input.

'Unfortunately, the Community Investment Tax has been in a sense a savings account,' he said.

'If you keep tapping it faster than it's growing in value or interest, then you're going to get in trouble down the road.'

Reporter Anthony McCartney can be reached at (813) 259-7616 or amccartney@tampatrib.com.

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