Stronger Tax Base Lightens Load

Guest Correspondence

BY KEVIN COOPER SRQ DAILY SATURDAY PERSPECTIVES EDITION SATURDAY JUN 13, 2015

The extent to which a local government is able to collect revenue is oftentimes referred to as its fiscal capacity.  The fiscal capacity of a community is important in that it significantly impacts the property tax rate, or fiscal effort, the community must levy in order to provide necessary programs and services.  In a general sense, the more capacity (i.e. value) a community has, the less effort (i.e. tax rate) it must levy in order to fund those programs and services. 

It’s not uncommon for fiscal capacity to be measured by a community’s per capita taxable value.  Per capita taxable value is as simple as it sounds: it looks at the total taxable value in a community and then divides it by the number of people in that community. 

The ideal situation is one where a community’s value grows at a faster pace than the cost to provide programs and services.  This is similar to the goal of many households where individuals wish to see their ability to earn money outpace their need to spend it.  Otherwise, stress is added to the system. In a household, that might mean a second job or taking on more debt. In a community, it typically means less or degrading programs and services or a higher tax rate.

In 1994, the per capita taxable value in Sarasota County was $54,387.

Between the years of 1994 and 2014, the total taxable value in the County grew significantly.  During that same time period the County’s population also grew, but at a much slower pace.  As a result, by 2014, the per capita taxable value in Sarasota County had grown to $112,255.  In 20 years, the County’s fiscal capacity more than doubled. 

In 1994, the property tax rate was 4.0917 (i.e., roughly $4.01 per $1,000 of taxable value).  By 2014, that rate dropped to 3.3912.  In twenty years, the County’s property tax fiscal effort was lessened by over 17 percent.

Perhaps surprisingly, from 1994 to 2014, the countywide per capita property tax in Sarasota outpaced inflation by just 7 percent.  The per capita taxable value, however, outpaced inflation by almost 30 percent. The bottom line for the Sarasota County taxpayer is that, on average, in 2014 he or she was paying a lower tax rate on their significantly more valuable property than was the case in 1994.

One factor used by the Florida Legislature to identify regions experiencing fiscal hardship are those areas where the “per capita taxable value is less than the statewide average for the current fiscal year.”  Last year, Sarasota County’s per capita taxable value was over 60 percent higher than the statewide average and home to the sixth highest per capita taxable value in the state of Florida. 

There are numerous opinions on Sarasota County’s growth and fiscal responsibility. The public should be aware that, over the past 20 years, the numbers indicate the community has seen its ability to earn money far outpace the additional amount being spent. In fact, if the tax rate were the same in 2014 as it was in 1994, taxpayers would have been on the hook for an additional $30 million.

SRQ Daily Columnist Kevin Cooper is the vice president for Public Policy and Sarasota Tomorrow Initiatives for The Greater Sarasota Chamber of Commerce

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