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Sales Tax Drop Hits County Budget

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By CHRISTIAN M. WADE and MIKE SALINERO

The Tampa Tribune

Published: September 3, 2008

TAMPA - As the state's economic slump continues, Florida consumers are cutting back on everything from buying cars to eating out.

That translates into less sales tax money for local governments already reeling from lower property tax revenue.

Hillsborough County economists recently lowered the sales tax estimate for next year by $7 million, to $301.8 million.

It was the third time this year the county has revised its sales tax figures downward for fiscal 2009, reflecting continuing bad news in the housing sector.

"It ties into what's happening in the housing market not only in terms of construction materials that normally drive some of our sales tax revenue, but when people buy new homes they buy furnishings and appliances," said Eric Johnson, the county's Management and Budget director. "You see all that suffer when the economy is going through tough times."

In Tampa, city finance officials learned last week from the state Department of Revenue that the city stands to lose another $1.4 million in sales tax money in the coming fiscal year, which begins Oct. 1.

The revised figures, which come on the heels of a previous $2.1 million projected loss, whittle the city's share of sales tax collections down to $27.1 million next ear.

Finance Director Bonnie Wise said her staff is still crunching the numbers and hasn't figured out where the money will come from to bridge the anticipated shortfall.

"We're still discussing it," she said Tuesday. "It's definitely hard."

The lower-than-expected collections come at a painful time for the city and county. Hillsborough's fiscal 2009 budget is being cut by more than $80 million because of property tax reductions approved by voters and slumping sales tax collections. About 100 county employees face layoffs.

Tampa faces a $16 million budget deficit. Mayor Pam Iorio's proposed $836-million fiscal 2009 budget anticipates a loss of more than $2.4 million in property tax revenue, mainly as a result of the Amendment 1 tax cuts. To help bridge that shortfall, she has proposed spending about $3.7 million from reserve funds.

City Councilman Tom Scott said the anticipated revenue losses will be hard to make up.

"We've already made major cuts," he said. "We'll have to find the money somewhere."

Ken Small, of the Florida League of Cities, said many cities and counties already had set their property tax rates for the next year based on previous revenue projections.

"I try to advise cities and counties that they should set their millage rates a little higher to provide some wiggle room," he said. "You can always go down, but you can't go up."

Small said sales tax revenue losses could continue on the downward spiral.

"I'm trying not to be too overly pessimistic about the state's economic outlook," he said. "But people that I've talked to say they just can't see the bottom yet."

Reporter Christian M. Wade can be reached at (813) 259-7679 or cwade@tampatrib.com. Reporter Mike Salinero can be reached at msalinero@tampatrib.com or

(813) 259-8303.

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