TDT is a ‘pot of gold’ as lawmakers consider changes to tax

The tourist development tax (TDT) continues to be a hot issue in the Legislature as lawmakers are eyeing the $1.8 billion bucket of taxes on hotel rooms and short-term stays in Florida.

A House tax bill is advancing that would require counties to renew the tax every six years despite many lawmakers’ concerns about the fiscal impact, while Senate leaders said they prefer the status quo without having to regularly go before voters.

As part of the House Ways and Means Committee’s tax bill (HB 7073), counties would be required to ask voters to renew the TDT every six years. Counties levying debt on the TDT proceeds would be allowed to pay off the existing debt first before going before voters.

Rep. Cyndi Stevenson, a St. Johns County Republican, had concerns Tuesday over the cost to the tourism industry to have recurring referendums on the TDT every six years. She also worried about the effect on smaller attractions if the money went away, particularly for advertising that an area is open for tourism after a hurricane.

Stevenson, though, still voted for the bill in support of the other tax cut measures included in it, as the House Appropriations Committee passed HB 7073 with a 25-4 vote.

The Senate version of the bill (SB 7074) doesn’t include the tourist development tax provision, and leaders in that chamber are skeptical of the idea.

“That is not the stance of the Senate,” said Senate Finance and Tax Chair Blaise Ingoglia, a Spring Hill Republican. “We think the status quo is probably the better way to do that.”

Also Tuesday, the House Ways and Means Committee convened for an informational TDT session as lawmakers learned about how the TDT became an unexpected success. In 1977, when it first began, the state expected $31 million if every county levied a 2% TDT, or about $165 million in today’s dollars from inflation. Now, the tax is projected to generate $1.8 billion a year.

Sixty-two of the 67 counties levy at least one TDT.

The majority of the TDT collection is paid by out-of-state and international visitors, although Floridians account for about 21% of the TDT, said Kimberly Berg, the committee’s deputy staff director. She compared it to residents paying a tax they had never formally approved.

“If you take your kids to the beach for Spring Break or to the theme park during Summer, you’re probably paying TDTs,” Berg said.

Four House bills have been filed to make changes. Those include HB 1297, which would open up TDT funding in Monroe County for affordable housing, and HB 1453, which would allow TDT money to be spent on funding for film and TV incentives.

Rep. Stan McClain, an Ocala Republican, chairs the Ways and Means Committee. He argued that local officials are pushing to spend the TDT on items outside its intended purposes, which include tourism promotion, tourist information bureaus and construction projects on publicly owned stadiums, convention centers and other facilities.

“I don’t know if that’s good public policy,” McClain said, referring to carving out individual TDT bills for local municipalities. “Not saying that they don’t have merit, a lot of them probably do have some merit. … But I don’t think that’s the best way for us to set public policy.”

Added Republican Rep. David Smith, “What I’m concerned about is that TDT is this pot of gold that people have their eyes on and it’s a convenient grab of money.”

The hotel and lodging industry has also fiercely lobbied against governments using the TDT for affordable housing, public safety and transportation, some of the biggest problems caused by a tourism-driven economy. 

Out of the 134 million people who visit Florida, more than half go to Orlando, making the city more popular than Paris, said Eric Gray, an Orlando advocate who spoke Tuesday.

With all those visitors, Gray warned there is a cost to the community that’s understudied and unknown.

“Do tourists take showers? When they visit, do they flush toilets? Do they drive on the streets? Do they rely on police, fire, emergency services? These are just a few of the important questions to consider when evaluating state statutes originally crafted almost 50 years ago when our visitation numbers were about a tenth of today’s total,” said Gray, the Executive Director for the Christian Service Center who was part of the recent Orange County government TDT task force.

“The vast importance of considering how TDT revenues are collected and expended could be one of the most critical things this body works on over the next 30 years because it’s so unique to the state.”

___

Gray Rohrer of Florida Politics contributed to this report.