By Ryan Lynch

Orange County will have an uncertain path forward after an effort to pass a penny sales tax hike for transportation improvements failed.

Why this matters: Transportation funding can provide future construction opportunities, help deal with traffic congestion in the long run and shape where investment is being made in a community.

With all 257 precincts reporting results, the tax failed by a margin of 58.32% against it to 41.68% in favor, according to the unofficial results from the Orange County Supervisor of Elections.

Orange County Mayor Jerry Demings had hoped the tax could generate $600 million per year over 20 years to boost transportation in the county with a dedicated source of funding.

Representatives with the county were not available for comment on what they plan to do next to address transportation needs.

Angel de la Portilla, president of Orlando-based Central Florida Strategies, said from the precinct data that many of those areas where Florida Gov. Ron DeSantis got more votes in Orange County — such as west Orange County, northwest Orange and parts of Winter Park — were also places where the tax did not get support. “Clearly, Republican voters were not voting for the tax.”

Democrats in some areas also did not go for the tax, as vote percentages where gubernatorial candidate Charlie Christ got support did not always match the level of support for the sales tax. De la Portilla added that the current economic environment, with high inflation and the potential for a recession next year, also were a key part of voter considerations.

However, if the county decided to bring back a penny sales tax hike effort, there is precedent for that. For example, Broward County in South Florida had a penny sales tax for transportation pass in 2018 after efforts in 2006 and another which combined transportation and municipal projects into a single penny tax in 2014 both failed.

If a tax hike was brought up in the future, voters would have to see themselves benefiting from it to get behind it, De la Portilla said.

Others have floated the idea of adding available funding through other methods, including existing taxes.

Florida Rep. Anna Eskamani (D-Orlando) told OBJ she likely would refile a bill in a future legislative session that would remove a provision on hotel bed tax revenue that says if the monies are used on public facilities projects, then at least 40% of the collected tourist development taxes must be used to promote and advertise tourism. Eskamani co-filed the bill during the 2022 regular legislative session but it did not advance to be considered.

The prior bill (HB 6075) would have expanded the hotel tax’s use for things like affordable housing and transportation, which brings more flexibility to the uses of the tax.

Eskamani said in discussion with residents she represented, some felt they would not be able to afford the additional load of the penny sales tax. “Right now, many of our residents do not want to face an additional tax.”

Other politicians also have floated changes to how the resort taxes can be used. Outgoing Florida Sen. George Gainer (R-Panama City) filed a bill (SB 1542) during the 2022 legislative session that would have expanded the use of tax to reimburse expenses tied to providing emergency services due to increased tourism. That bill did not advance either.

Tourism industry groups such as the Central Florida Hotel & Lodging Association have opposed the expansion of these taxes in the past.

Source: Orlando Business Journal

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