As local governments wait for the result of November’s property tax amendment, Okaloosa County Commissioners are planning ahead for ways to continue services.
At Tuesday’s regular meeting, Commissioner Trey Goodwin presented a potential legislative initiative that would general funds from homestead property taxes to a consumption tax.
The initiative is called “A Penny to Save Our County Homes – A Zero Homestead Millage Initiative.” With the proposal, a coalition of counties and cities would seek state legislative authorization to replace homestead property taxes with a 1% local option county-wide sales tax. If voters approve the tax, it could be a “more equitable” solution, said Goodwin. The proposal may also incentivize first-time homebuyers by taxing the burden of property taxes away.
“Under the initiatives from the state it doesn’t get everybody to a zero general millage tax bill on their homestead and this proposal could actually do that,” he said. “At least in our county, a penny sales tax could replace general homestead millage (or taxes) levied by Okaloosa County.”
Goodwin said the tax does not replace commercial or investment property taxes.
“This is talking about where people live,” he explained.
The initiative would require approval of at least 60% of county voters. The proposal would not affect school district taxes, fire districts, independent special districts, non-ad valorem assessments, MSBUs (Municipal Services Benefit Unit), or other local taxing authorities. According to agenda documents, a one-cent sales tax split between Okaloosa County and its nine cities could replace the $37 million the county currently collects annually from homestead taxes.
If the initiative were authorized by state legislature, it would give counties the ability to hold their own referendums.
“It’s a county-by-county decision,” he said.
Before commissioners voted unanimously to pursue the initiative, there was some debate.
Commissioner Drew Palmer said he liked the idea but raised concerns that a higher sales tax rate could put the county at a disadvantage to neighboring counties and send tourists away.
Commissioner Ketchel worried that the board could be acting too fast.
“We don’t know how this vote is going to go in November,” she said. “We’ve always been extremely good at taking care of our people … we could benefit from this if we have to.”
There is no draft legislation yet. The board’s vote directs county staff to further develop the legislative framework and outreach to the state’s other 66 counties.
