To Tax or Not to Tax?

By Frank D'Alessandro

Each year, it seems, a new long-range business issue pushes its way to the forefront of our agendas. For the past couple of years that issue has been workforce -- ensuring that our area has an ample supply of trained workers to keep us competitive in the 21st century.

However, recently, a new issue has begun to pop up on the radar screen and it is beginning to garner long-needed attention. That issue is transportation and, more specifically, Southwest Florida's transportation network.

Our roads network often goes unnoticed when we are strategizing about business and economic development issues and trends. Nevertheless, it is vitally important. If you have inched along Interstate 75 in south Lee County recently in bumper-to-bumper traffic, you know why.

Delays vs. Profits

A clogged transportation network can be a real waste of time and money. Highway travel is the means by which most businesses in Southwest Florida move their goods and services in, through and out of our market. It is how we get to appointments, jobs and job sites. If it slows down, so does our productivity and our profits.

From strictly a development standpoint, which is what I'm most familiar with, it is quite simple: a lack of roads means no development, and congested roads bring slowed or delayed development until the situation is resolved.

In the June issue of this magazine, I talked about the tremendous commercial growth and growth Potential we're experiencing in south Lee County from Daniels Parkway in South Fort Myers to Coconut Road near Bonita Springs. I will repeat: the only limit to this growth may be what helped spur it in the first place -- I-75. If I-75 becomes more congested with no relief from any other north-south corridors, sales will slow and choke off development, and we will effectively have a self-imposed building moratorium in that area.

One Voice

What has also led to this new awareness of our failing road network is the lack of state and federal funding Lee County has received to improve area transportation. I find this fact both amazing and somewhat alarming: In the statewide division this year of $325 million of interstate highway funds, Collier County received only $610,000 and Lee County did not get any!

In addition, a recent Transportation Cornerstone Report by the Florida Chamber of Commerce didn't include Southwest Florida in its funding priorities. Where did the money go? Orlando and Interstate 4; Miami and Jacksonville and Interstate 95.

I think we are beginning to realize two things. First, Southwest Florida needs to lobby more effectively at both the state and national levels for transportation funding. The Jacksonvilles and Orlandos of this world that have galvanized their business communities and lobbied as one voice have obviously benefited. Such organizations as the Southwest Florida Transportation Initiative (SWIFTI), Southwest Florida Regional Planning Council and Horizon Council currently are working to strengthen our area's presence and lobbying efforts in Tallahassee and Washington.

A Sales Tax?

Second, we may need to bear more of the burden locally, using our money to build a better local transportation network, and either build or expedite projects the state and federal governments won't -- or haven't -- committed to.

Where will all this money come from? Impact fees? You would have to triple them to pay for all the projects that are needed. Property taxes? Homeowners already bear most the burden for public projects. Tourist taxes? They cannot be used for roads.

One idea Lee County government is considering for a November 2000 voter referendum is increasing the sales tax by a penny per dollar for the county and cities. In other words, the six cents per dollar tax you now pay on retail purchases would increase to seven cents. This could raise up to $275 million over five years, to be split among the county and cities for roads, libraries and public safety. The county receives only 10 percent of the 6-cent sales tax the state charges. It would receive 100 percent of the proposed surtax.

While I am not for a tax increase any more than most others, I do recognize that the funds for capital improvements must come from somewhere. With the proposed surtax, visitors and tourists, who contribute to road congestion, will share the financial burden for road construction, easing the load on local citizens. Because of this, the proposed tax deserves a thorough review. Below are the major merits of the surtax:

It is probably the most broad-based tax that can be levied. Everyone pays, including the 1.8 million tourists that visit Lee County each year and the 65,000 winter residents. The burden does not fall solely to homeowners, developers or tourists. We all help pay. And we should all help pay.

The surtax would have to be approved at a Nov. 2 voter referendum and would be in effect for only five years. County commissioners could not unilaterally continue it without voter approval.

Because the county could raise such a substantial amount of money in such a short period with the surtax, it could pay for projects as it goes. Increasing property taxes would require the county to issue bonds and pay tens of millions of dollars in interest. In fact, increasing property taxes to pay for the same projects would be 20 times more expensive for the average household.

You will know for what you are paying. The sales tax increase would be tied to a list of needed projects. Some road projects being considered with potential sales tax money include the design study for six laning I-75 and six laning U.S. 41 to the Collier County line. It could also help to build much needed connects such as the Del Prado Extension to I-75, Treeline Extension to Colonial Boulevard and Metro Parkway Extension.

I encourage all business people to consider the sales tax option if it's placed on a November 2000 referendum. Don't say no immediately. Study it. Study the projects it's funding. Can we do without these road projects? Sure. But how will a congested transportation network affect your profits and quality of life? That is the question we have to ask.

Frank D'Alessandro is the CEO of Grubb & Ellis|VIP-D'Alessandro, a full-service commercial real estate firm serving Southwest Florida.