Local Discretionary Sales Surtax

Overview

On November 8, 2016, Broward County residents who are registered voters will have the opportunity to vote on a proposed penny sales surtax increase to pay for transportation and infrastructure projects county-wide. If approved, Broward’s sales tax would increase from 6 percent to 7 percent. In June 2016, Broward County government and representatives from Broward’s municipalities signed an Interlocal Agreement (ILA), which summarized how proceeds from the sales surtax would be spent. A summary of the ILA follows:
-A ½ penny of the sales surtax proceeds will be dedicated to Broward County to pay for regional transportation projects for 30 years.
-A ½ penny of the sales surtax proceeds (distributed by population countywide) will be dedicated to Broward’s 31 municipalities and unincorporated Broward County to fund local infrastructure projects for 20 years. In years 21-30, 60% of this infrastructure ½ penny will continue to flow to Broward’s municipalities for local infrastructure projects, and 40% will flow to Broward County for regional infrastructure projects.
-The sales surtax is projected to generate an estimated $300 million in the first year, with that number expected to rise over 30 years. Approximately one third of the sales surtax proceeds will be paid for by tourists.
-All sales surtax proceeds expenditures will be monitored by an Oversight Board compromised of nine members, which will approve the expenditures and ensure that all money is spent on permissible projects.

A Penny at Work

Broward County and the 31 municipalities in Broward have created a plan for how potential surtax revenues will be spent. Proposed projects and more information about how money would be spent in your city is available at: www.apennyatwork.com

Background

Mobility, the movement of people and goods, can be broken down into two factors: transportation and infrastructure. Funding transportation and infrastructure has become increasingly difficult. Public revenues available to pay for transportation improvements have declined due to increased vehicle fuel efficiency, fewer vehicle miles traveled, and the fact that the federal gas tax has not been raised since 1993. The federal gas tax was designed to fully cover the costs of transportation, but Congress has had to fill the funding gap in the Highway Trust Fund through short term infusions. This has created an inconsistent and inadequate transportation funding system. If the Broward region is to have a more robust transportation system and the essential infrastructure to sustain a growing population and attract new businesses, the region will need to look inward for a source of dedicated funding.

Surtax Options

State law provides for two sales surtax options (as laid out in Florida Statute Section 212.055) with proceeds available to fund transportation and/or infrastructure projects in a County. Each surtax is limited to the first $5,000 of any taxable purchase. Broward County has the option to levy either or a combination of the Charter County and Regional Transportation System Surtax or Local Government Infrastructure Surtax. Each option authorizes the funds to be used for different purposes as illustrated in this Fact Sheet.

History

*Recording available upon request

References and Resources

• 2015 Local Government Financial Information Handbook
• Transportation Needs Spreadsheet- Updated 3/8/16
• Summary Discretionary Surtax Funding Plan
• Discretionary Surtax Funding Plan Full Text *This document is still in draft stages and is subject to change
• Fact Sheet- Broward MPO Roles and Responsibilities
• Infrastructure Resolution- Municipality Votes as of 6/24/16
• Municipal Transportation and Infrastructure Needs
• Regional Distribution of Surtax Revenues
• Broward Surtax Initiatives Fact Sheet- August 2016