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Sarasota County ends business tax

Written by on Wednesday, June 5, 2024

This, even though business people plead with commissioners to let them pay the tax.


By Tyler Oldano

Original Air Date: June 5, 2024

Host: Traditionally, the political left had a monopoly on criticizing corporate welfare. But recently, the biggest critics of the corporate relocation industry with its tax breaks and sometimes direct subsidies has been the political right. Last year, the Republican supermajority in the Florida Legislature defunded and disbanded Enterprise Florida, the public-private partnership that spearheaded corporate relocation to the state. Now, Sarasota County Commissioner Mike Moran is mirroring state politics by ending a local business tax. Tyler Oldano shows us how the county is defunding a public-private partnership that is not only in charge of corporate relocation incentives, but also supports existing local businesses. And that was a recipe for pushback.

Tyler Oldano: In a county commission meeting Tuesday morning, resident after resident told officials about all the ways the Economic Development Corporation, or EDC, has helped their businesses grow.

EDC event

Business owner 1: In the past two weeks, we’ve signed contracts with Siemens, [inaudible], Nascar, Oakview Group, and ASM, the largest sports and entertainment venues in America, none of this wouldn’t have happened without direct involvement from the EDC.

TO: Those present at the meeting say the EDC has helped with a variety of services, like making connections, helping with zoning permits, and even recovery from disasters such as Red Tide and COVID-19.

Business owner 2: With these roadblocks to profitability and future development that’ve happened, I along with other business owners, have been grateful to the EDC for being there to support us and others in various ways, including their administration of a loan program, which helped a couple hundred small businesses in our county from struggling to keep their doors open.

TO: While many business owners are in support of the EDC, some county commissioners were concerned with their method of funding. While the EDC has a large number of private corporations who invest in their work, they rely on county funding to fuel their efforts. Many avenues of government funding exist, but it was the county’s business tax that Commissioner Mike Moran is concerned about. Established in 1992, the tax money is used to fund the EDC and their work across Sarasota County.

Despite the Moran’s concerns, many of those present seemed happy to pay the tax.

Business owner 3: As a rule, I’m personally not a fan of any tax, but this local business tax, which funds close to 30% of the EDC budget, is literally a very small price to pay as a business for the greater good.

TO: Even so, Moran — who is termed out this year — proposes repealing the business tax entirely, citing previous tales of mismanaged government funds, and a desire to stop taxing local business owners.

Mike Moran: This is exactly the kind of mismanagement of local government taxing that taxpayers are frustrated about. I want to be able to leave this commission knowing I did everything in my power to stop this tax.

Moran

TO: Other commissioners, however, disagreed with Moran’s proposal, saying that while there were issues in the past, the EDC has shown an upward trajectory. Back in 2023, commissioners ruled that if an organization gets more than half a million dollars of federal funding, then someone from the county is required to sit on the board. Since then, a whole new board of directors was elected for the EDC, one of which is County Commissioner Ron Cutsinger. He says that while there had been some problems in the past, the EDC has changed.

Ron Cutsinger: There’s been a huge course correction, as evidenced by the testimony this morning, so we’ve got an entirely new organization. We have a new board. We have new leadership. We have a new mission, I really understand re-litigating the past to learn from it. But at this point we’ve done that and turned it around.

TO: Instead of going through tax directly, Moran wants the EDC to go through the county’s general fund, meaning it’d compete yearly for funding against roads, sewers, and other infrastructure. Moran says that this would allow for more government oversight on how those funds are used as well.

Commissioner Mark Smith, however, says that he thinks the board is misguided in this effort.

Mark Smith: You know, as a good Republican, we’re against all taxes. But the folks being taxed are the ones fighting to be taxed, which makes it a very unusual situation. And so we’re going to take the tax away from the folks that want to pay it. And we’re going to put it in the general fund to the general public that doesn’t know anything about it.

TO: At the end of the meeting, the commissioners voted 4-1 to repeal the business tax. This meant that $400,000 of funding could be out of reach for the corporation. To remedy it, commissioners pushed the EDC to pursue more private funding, but even the commissioners said that may be a challenge.

Commissioner Joe Neunder:

Joe Neunder: It’s going to get real for you all very quickly, in that you need to be out there in the private sector, with the chambers, with the Who’s Who, the leaders of our community, asking for more privatized buy-in to your organization.

TO: This all begs the question, how will this affect the EDC and the services they provide to businesses? Well, we asked them, and they told us this:

“The proposed Local Business Tax (LBT) repeal would have an immediate -$472,421 impact on the EDC’s FY25 budget, which begins on October 1, 2024. At this time, there is still a lot to be understood about the various implications and potential other funding opportunities.”

No matter what the outcome is, though, the corporation that helped many small businesses expand, could end up relying on them for help.

Reporting in Venice, Tyler Oldano for WSLR News.

WSLR News aims to keep the local community informed with our 1/2 hour local news show, quarterly newspaper and social media feeds. The local news broadcast airs on Wednesdays and Fridays at 6pm.