Okaloosa officials seek countywide bed tax district
In 2020, a referendum on whether to expand Okaloosa County’s tourist development tax district countywide will appear on either the Aug. 25 primary election ballot or Nov. 3 general election ballot, according to County Commissioner Graham Fountain.
RELATED (June 2018): Okaloosa snuffs bed-tax district expansion talk, for now
"It will definitely be a part of this next election cycle," he said Friday.
Fountain represents District 1, which includes most of Crestview. He said the timing of the TDT or "bed tax" district expansion question hinges on whether a possible county School District half-cent sales tax initiative gets finalized.
Money from the possible half-penny sales tax would pay for new and improved roofs at various schools, new school buses and other needs.
"I’ve had some citizens say they might want the half-cent sales tax issue on the November ballot," Fountain said.
If the county School Board approves the sales tax question for November, the bed tax district expansion issue would go before voters in August.
Fountain said while he hasn’t yet seen any ballot language on the possible expansion, staff has been talking with county Supervisor of Elections Paul Lux and other local officials about the initiative.
"The whole north end of the county and Niceville are interested," Fountain said. "I guess when they created the tax district, they didn’t think of Niceville having hotels and people staying there to go to the beach."
The commission approved the existing bed-tax district and the county Tourist Development Council in 1989. The district encompasses Mary Esther, Cinco Bayou, Destin, the southern part of Fort Walton Beach and unincorporated areas immediately next to Destin and Fort Walton Beach, such as Okaloosa Island.
With voter approval in 2020, the countywide district would generate bed tax revenue for projects and programs in cities such as Crestview, Niceville, Valparaiso and Shalimar, as well as various parts of the unincorporated area.
The TDC’s expenditures are funded by the 5% bed tax paid by visitors staying overnight within the existing district. Revenue from the tax can only be used in the district.
The money mostly is used to promote the area to tourists and to fund beach safety and beach improvement efforts. Also, state law allows the revenue to be spent on public facility projects if they benefit tourist-related businesses and if other conditions are met.
County officials anticipate receiving a little more than $22 million in bed tax revenue this fiscal year.
According to an estimate the county provided last spring, about $2.25 million in additional revenue would be generated by expanding the bed tax district countywide.
"I think that’s a very low estimate," Fountain said. "I think that was an estimate that was one or two years old. We’ve had a lot of new hotels built since then."
Only voters who do not live within the existing bed tax district would vote on whether to expand it. With simple-majority approval, the expansion would take effect at the start of the 2021 calendar year.
"I hope they would approve it," said Fountain, who noted some of the newly generated money could be used to promote ecotourism in the central and north parts of the county.
"It would be nice to be able to partner with some of these landowners on the rivers and lakes to do more canoeing and camping," he said. "We could get matching funds and even build some new parks."
Crestview City Manager Tim Bolduc said Crestview officials are in favor of a countywide bed tax district as long as its revenue is distributed equitably.
County officials have discussed splitting the potential countywide district for budgetary and fairness purposes. For example, revenue from the area north of Cinco Bayou would be spent only on projects and other items within that area, while revenue from the south would pay only for south-side expenses.
Bolduc said Crestview’s potential bed tax revenue could help pay for the development of a regional sports complex on the old Foxwood Country Club property, which the city is trying to purchase.
"If we can buy it and invest in it, we can protect the wetlands and wildlife" on the property while also drawing in visitors, he said.
The County Commission discussed the possible bed tax district expansion in the summer of 2018 before deciding to fully focus on the county’s half-cent sales tax referendum, which went on the November 2018 ballot.
Voters approved that referendum, and the county’s 10-year half-penny sales tax took effect at the start of this year. The sales tax is estimated to generate almost $20 million per year to help the county and its municipalities pay for public safety, transportation and stormwater system upgrades and public-safety equipment purchases.
The commission revived the bed-tax district expansion initiative during a budget policy workshop this past April.
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