County plans to kill tax that funds local EDC

Sarasota County Commissioners, with a 3-2 vote, approved a proposal that will begin phasing out the county’s local business tax and redirect the Economic Development Corp.’s existing reserves to the county’s general fund budget. 

Sarasota County Commissioner Mike Moran, who brought forth the proposal, has long criticized the effectiveness of the EDC and on Tuesday, June 8, at a commissioner board meeting, said it was time the organization be held accountable. The debate and vote was first reported on by the Sarasota Observer, sister paper of the Business Observer. 

The EDC was established as an independent agency in 2004 with the goal of sustaining and growing businesses in Sarasota County. However, Moran says that in the past five years, EDC leaders have failed to provide metrics that demonstrate the success of its programs. 

“This has been going on for years. It didn’t just spring up. This wasn’t a rash decision on my part,” Moran says. “From the very beginning, all I’ve ever asked for is clear, measurable goals. I made it very clear that I wanted less words on paper and more numbers on an Excel spreadsheet.” 

So, he says the best thing to do now is to redirect tax revenue to a program that can prove successful. 

Under his proposal, the county’s local business tax will be phased out by the end of fiscal year 2024. The tax would be maintained through fiscal year 2022 and then lowered by one-third each following fiscal year. 

Moran proposed the county would remain a dues-paying member of the EDC and could choose to support certain incentives, it just wouldn’t divert taxes to it. In fiscal year 2021, the EDC’s $1.7 million budget included $1.07 million in public funding. 

Many local business officials say the plan would make it nearly impossible to be competitive when attempting to bring business to the area. 

Kathy Lehner, president of the Venice Area Chamber of Commerce, says the county needs the EDC to continue promoting business growth in the area. 

“There would be a huge gap with anyone who would actively recruit new business, which we need,” Lehner says. “We would be driving companies down to Lee County and Charlotte County where workforce is. We need someone actively championing Sarasota County.”

In addition to ending the tax, Moran proposed reallocating much of the county’s economic development incentive fund — which totals $5.96 million — toward the general fund. A total of $1 million would be left for future EDC incentive opportunities. 

Moran says he’d like to see the funds from the economic development incentive fund be used to support a special mental healthcare district, another of his proposals. 

Dave Bullock, interim EDC CEO and president, says the proposal pits mental health services against economic development when the county could still viably have both programs. 

“Sarasota County is a sophisticated community with a rich history of addressing complex community priorities in responsible ways,” Bullock says. “This false choice put forth in this motion does not pass the standard of good governance or good community decision making.” 

However, Moran contends the EDC needs to be held accountable for years of underperformance. He says in the past the board has laid out spreadsheets of what reporting should be done on a quarterly basis and was “met with deaf ears.” 

“I think the time has come to force the accountability for the taxpayer and the business community that’s being taxed,” Moran says. 

Commissioner Christian Ziegler questioned whether commissioners could start the process of ending funding to the EDC and then, if the EDC shows positive metrics, restore funding in the future.

“Bringing something like this basically forces the EDC to restructure and act quickly,” Ziegler says. “I am so frustrated that this just gets dragged out so long so this is a way that you maybe can force that accountability and that reset.” 

Moran says commissioners could include an itemized list of measurable goals for the EDC to achieve in the next year to regain funding. Should the EDC prove successful, Moran says he’d be happy to restore funding. 

Ziegler also questioned the potential of making a business tax collection to go toward the EDC optional for local business owners. That way, owners could chose whether to support the EDC’s initiatives.

Not all commissioners felt the same, however. Commissioner Nancy Detert, who also has been a critic of the EDC, says that although it’s taken too long, the EDC is finally in a place where it could see large returns on investment. To stop funding now, she says, would be a mistake.

“Like Lady Gaga, that great philosopher, said, ‘We’re on the edge of glory,’” Detert says. “Now we’re just going to blow it with this stuff?”   

Commissioner Ron Cutsinger feared a defunding process would cause any potential EDC CEO candidates to shy away from the county. To have a successful program, he says, the EDC needs a high-quality CEO. 

“If I’m a potential candidate looking at moving my family to Sarasota County to take this role and there is a very hesitant, tentative board, I can’t see moving here at that point,” Cutsinger says. 

In the end, commissioners voted 3-2 in two separate votes to approve the tax model that would end funding by 2024 and reallocating funds from EDIF to the general fund. Commissioners Detert and Cutsinger opposed both measures.