How much would raising Palm Beach County’s sales tax cost you?

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If you’ve been following the debate over whether Palm Beach County should increase the sales tax to 7 percent, you know that the proposal would cost you an extra penny on the dollar.

But how much would it cost you over, say, the course of a year?

The answer is easy if you know how much you spend in a given year on taxable goods and services. Just multiply your expected spending by 0.01.

But most people don’t have a good grasp on that figure. And since people’s spending habits vary widely, it’s not easy to determine the impact on an average household.

But to get a sense of what the annual cost of the hike would be, we’ve assembled three ways to approximate how much the average household would be affected.

The big takeaway: if voters decide to raise the sales tax, the average household would likely pay between $129 and $254 more per year, depending on whose methodology you consider.

To get that range, here are the three methods that we looked at:

Simple Math

MoneyOne way to estimate the impact on households is to take the amount that the sales tax hike is expected to raise and work backwards from there.

If approved on Nov. 8, state officials estimate that the sales tax increase would raise about $2.7 billion over 10 years — money that would go the county’s public schools and municipal governments for construction projects and facility improvements.

How much the average household would contribute to that is difficult to calculate, in part because a large share of it would be paid by businesses and out-of-town visitors.

If county households shouldered the entire load, each of the county’s roughly 530,000 households would pay out an estimated $509 per year on average.

But residents won’t pay the whole thing. Tourists and other out-of-town visitors will pay, too. County officials estimate that they may foot up to a quarter of that bill.

That estimate is disputed — Florida TaxWatch thinks it is too high — but if you accept it, the annual impact per county household drops to $381.

Then we have to account for businesses’ share. Kurt Wenner, vice president of Florida TaxWatch, estimates that businesses typically pay about a third of sales taxes.

After accounting for that, households would be left paying $254 a year on average.

(Keep in mind, though, that business expenses are usually passed on to customers, so much of businesses’ share of the extra sales tax would eventually be paid by residents through higher prices.)

Online Estimators

Image (2) Money%20stacks-thumb.jpg for post 1226Another way is to take advantage of online sales tax estimators, a method suggested by Mike Burke, the Palm Beach County School District’s chief financial officer.

When we asked him for a projection, Burke took two separate online sales tax calculators that give Florida-specific estimates: one operated by the IRS and one operated by SmartAsset.com.

Using each estimator, Burke creates a sales tax projection for a household paying the median county household income: $52,878.

Each site gives a different figure: $111 from the IRS and $147 from SmartAssset.

Burke decided to split the difference between the two. The result is an estimated increase of $129 a year for a household with median earnings.

(One flaw in this method: The online estimators consider Florida as a whole, but Palm Beach County has a higher cost of living than most of the rest of the state, meaning county residents tend to spend more on goods and services than the typical Floridian).

One-third of income

Image (5) dollar-thumb.jpg for post 1175Another method is a more simple one suggested by Florida TaxWatch, a Tallahassee-based non-profit that studies tax policy.

Kurt Wenner, the group’s vice president, said that the average household typically spend about a third of its income on taxable purchases.

For the average county household, that would mean spending $17,608 on taxable goods. If the sales tax is increased, such a household would end up paying an extra $176 a year.

(Note: This method assumes that the household makes all of its taxable purchases within the county, so it may be less precise for families that spend a lot on out-of-county purchases through online vendors.)

One way to weigh the choice

Of course, tax experts the cost itself isn’t the only factor a person should weigh in deciding how to vote.

Richard Hawkins, a professor at the University of West Florida who studies sales taxes, said that voters should weigh the general upsides of how the sales tax would be spent against the costs to them personally.

“The more fundamental question is: Will the county be a better place to live with the new capital spending AND the new levy, or will it not?” he said.

2 forums on school district plans for $1.3B in sales tax this week

Have questions about how the Palm Beach County School District would spend the $1.3 billion if voters approve a penny sales tax increase in November? Monday and Tuesday night, the district will host two more community meetings to give you answers.

Schools Superintendent Robert Avossa and his staff will be taking questions from 5:30 to 7 p.m. at John I. Leonard High School in Greenacres Monday. Tuesday, the forum moves to Olympic Heights High west of Boca Raton at the same hours.

The school district is asking voters to approve a penny sales tax increase.
The school district is asking voters to approve a penny sales tax increase.

The meetings began in August with a meeting at Palm Beach Gardens High and days later Royal Palm Beach High hosted. Another meeting was held last week at Atlantic High in Delray Beach.

If you want to see a school-by-school list of projects from roofs to air conditioners and more, the district has a searchable list here. 

Here is the schedule for the remaining events:

Monday, Sept. 12, 2016

John I. Leonard in Greenacres

4701 10th Ave. N.

530 p.m. – 7 p.m.

 

Tuesday, Sept. 13

Olympic Heights in suburban Boca Raton

20101 Lyons Rd

530 p.m. – 7 p.m.

 

Monday, Sept. 19

 

Roosevelt Middle School (corrected from earlier post)

1900 N. Australian Ave. in West Palm Beach

5:30 p.m. – 7 p.m.

 

Thursday, Sept. 29

Park Vista Community High

7900 Jog Road, suburban Lake Worth

5:30 p.m. – 7 p.m.

 

Tuesday, Oct. 4

Glades Central High

1001 SW Ave. M, Belle Glade

5:30 p.m.- 7 p.m.

 

Tuesday, Oct. 11

Highland Elementary School

500 Highland Ave., Lake Worth

6:30 p.m. – 8 p.m. (Note that this is an hour later than previous forums.)

 

Source: The Palm Beach County School District Calendar

Avossa and other school board representatives also will be making other presentations and answering questions to specific community groups in the coming weeks. See that schedule here.   

BREAKING: PBC Commission, school board members approve new sales tax plan

Palm Beach County Commissioners vote 5-2 to eliminate economic development incentives and construction projects at cultural institutions from the split of money collected by a proposed sales tax increase during a public hearing at the Palm Beach County Governmental Center in West Palm Beach, Florida on March 1, 2016. (Allen Eyestone / The Palm Beach Post)
Palm Beach County Commissioners vote 5-2 to eliminate economic development incentives and construction projects at cultural institutions from the split of money collected by a proposed sales tax increase during a public hearing at the Palm Beach County Governmental Center in West Palm Beach, Florida on March 1, 2016. (Allen Eyestone / The Palm Beach Post)

During a joint meeting to smooth over differences, Palm Beach County commissioners and school board members agreed on a joint plan to raise the county’s 6-cent sales tax by a penny on the dollar.

Commissioners and school board members had previously agreed on the broad outlines of the tax increase, which would generate $2.7 billion over 10 years for repairs to roads, bridges, schools and county buildings. School board members expressed concern, however, when commissioners changed the plan, stripping out a combined $161 million in funding for cultural projects and for economic development incentives.

On Tuesday at Palm Beach State College’s Lake Worth campus, commissioners and school board members agreed to a revised plan, which includes a provision to end the tax early if $2.7 billion is generated earlier than 10 years.

What projects could be funded with from sales tax revenue?

Palm Beach County-wide projects, including county buildings

Municipalities’ projects, including roads and bridges

Palm Beach County schools, including repairing aging school buildings

>>RELATED: Full coverage of the proposed sales tax

Check with http://www.mypalmbeachpost.com later for more on this story.

-Wayne Washington

Updated: What PBC students got from $651M of last school sales tax

Schools Superintendent Robert Avossa
Schools Superintendent Robert Avossa

 

In a case of perfect timing,  just as the Palm Beach County School Board considers collaborating with the county to pursue a one penny sales tax, the committee that oversaw spending on the district’s last, now-expired sales tax has released its report on how that one went.

Update: 

Only this month did the Palm Beach County School District close the books on the projects paid for by the half-cent sales tax that expired in 2010. The last project on those books was The Conservatory @ North Palm Beach school which opened a year ago, said David Porter, who served on the independent oversight committee that kept tabs on the projects.

The books closed, the committee, which last met three years ago, moved to reviewing the projects and the process and issued its final report March 4, Porter said. It was a report the committee intended to produce from the beginning, he said.

“We wanted to do that to show the public,” Porter said. That the report comes amid discussions of a new sales tax was both coincidental and fortunate, he said. “It wasn’t planned. We could’ve written it three years ago, but we wanted to wait until all the bills got paid.”

For a school-by-school list of projects refer to the 2005-2009 Five Year Capital Plan.

The board has agreed 5-2 to combine with the county to seek raising the sales tax, but gave the county commission until April 15 to commit to the joint effort.

Schools Superintendent Robert Avossa discussed the 7-page report titled “Promises Made/Promises Kept”at a media briefing before today’s (Wed. March 16) school board meeting.

That sales tax was a 1/2 cent sales tax approved by county voters in 2004 to remain in place for five years or until $560 million was raised.

In the end, the tax expired in 2010 after generating more than $651 million – the additional cash was because the sales tax had to run to the end of the calendar year.

The money was intended for the district’s construction program. Back then the district was rushing to keep up with a growing student body and demands of class size reduction.

According to the committee, 98 percent of the 161 projects were completed, and the four that weren’t got sidelined because by the time they rolled around students had moved and there weren’t enough to fill a new school.

The oversight committee (full name: Independent Sales Surtax Oversight Committee or ISSOC) was comprised of 13 “stakeholders”, most of them not employees of the district.

The committee met for seven years to review each construction project and its costs.

What did voters get for their money?

• 24 New and Replacement Schools • 23 Classroom Additions • 7 Pre-K Centers • 4 Auditoriums • 3 High School Stadiums • 47 Schools received Covered Walkways • 45 Schools received Computer Connectivity • 5 Career Academy Additions • 1 Swimming Pool