Sales Tax Downturn Imperils Projects

By ANTHONY McCARTNEY, The Tampa Tribune
http://www2.tbo.com/content/2007/oct/02/na-sales-tax-downturn-imperils-projects1/
Published: October 2, 2007 

TAMPA - A slumping economy has forced Hillsborough County budget officials to significantly downgrade estimates on how many millions will be collected from the Community Investment Tax, which helps pay for everything from road improvements to new schools.

Rather than having $480 million left to spend before the tax expires in 2026, the county may have only $213 million.

That imperils plans for mass transit, roads, sewers and other future infrastructure needs. The revised estimate may even affect Wednesday's scheduled debate over a proposed $40 million sports complex in northeast Hillsborough known as Championship Park.

'It makes me want to take a look at everything we're doing,' County Commissioner Al Higginbotham said.

Debt Management Director Mike Merrill warned commissioners about having less CIT money in a memo last week. He wrote that a downturn in the region's housing and mortgage markets was contributing to the slump. The backers of bonds that the county uses to pay for CIT projects doubt Hillsborough will receive as much money from the sales tax collections as expected.

'Before all this stuff hit, they were quite satisfied with our projections,' he said.

Merrill and others had predicted sales tax collections to grow 6 percent in coming years; he downgraded those estimates to 3 percent. He said it's a worst-case projection and that he expects the returns to rebound to six percent after 2010.

Still, the downward forecast for the next several years limits the number of projects lenders will be willing to back.

The CIT was approved by voters in 1996 to pay for construction of Raymond James Stadium, as well as numerous public works projects such as schools and storm water improvements.

It is a key source of money for commissioners, who have drawn on future revenue from the tax to pay for parks, fire stations and road projects. Recently, commissioners approved spending $500 million on road improvements.

There should be enough money to back the road improvements, Championship Park and other projects that may be necessary - such as a new jail and courthouse - before the tax expires in 2026.

Championship Park's main proponent, commission chairman Jim Norman, said the lower estimates shouldn't affect Wednesday's vote.

'You're talking about 20-something years out,' he said.

After borrowing for those projects, though, there will be little else left over for mass transit or sewers, parks or other projects that have yet to be planned.

Sheriff Warns Commissioners

The CIT was projected to earn $4.8 billion over its 30-year lifespan.

Nearly $300 million was set aside to build and maintain Raymond James Stadium, and another $1.2 billion was earmarked for schools.

Local governments - Hillsborough County being the largest - split the remaining $3.3 billion. Between 1997 and September 2006, Hillsborough had spent $443 million and allocated another $437 million to be spent by 2016.

Merrill had told commissioners during a meeting in August that they and future boards would have about $480 million in CIT remaining for future projects. His presentation came after Hillsborough County Sheriff David Gee wrote commissioners, warning them that they were allocating too much of the sales tax money without thinking about infrastructure needs for the tax's final decade.

Gee said he'll need $250 million to build a new jail and other facilities over the next 20 years. Court officials expect to need $100 million for a new courthouse.

In his memo to commissioners, Merrill assured the board those projects could be built despite the downturn in CIT collections, but only if other taxing sources also were used.

County Commissioner Ken Hagan said the downturn will likely affect plans to spend up to $2 billion on more transportation improvements, including mass transit. Hagan chaired a task force that recommended the $500 million in improvements approved by the board this year; those focused on intersection improvements, road widenings and other measures intended to improve traffic.

The task force plans to reconvene within the next month to discuss other projects, including mass transit options.

Norman said that if built, Championship Park would help bolster CIT returns. He said the project would earn money and repay the initial investment, and could draw up to 100,000 people to the facility, currently slated to be built on 425 acres north of Plant City.

'It will help sales taxes,' he said.

Ferlita: Wrong Time For Park

County Commissioner Rose Ferlita said the bleak projections issued last week should be a wakeup call. 'The timing is wrong,' she said. 'We are strapped and we don't know how much more we're going to be strapped.'

To spend money on the sports park would jeopardize other projects, including future public safety needs. It will also hamstring future county commissions, which will have little if anything to spend, she said.

Merrill said spending the CIT money now makes sense, since many of the construction projects would be cheaper to build now.

A 10-year report released this year shows dozens of county projects paid for with CIT dollars, including library renovations, construction of new fire stations, nearly 1,000 miles of road repaving and numerous park, sidewalk and sewer projects.

'I don't think you can make the claim that that money has not been spent wisely,' Hagan said.

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