The Orange County mayor's office isn't telling the truth as it tries to sell voters on a higher sales tax
The administration of Orange County Mayor Jerry Demings has been dishonest about whether we can use another source of money to help pay for some of central Florida's road and transit needs.
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A few weeks ago, Orange County Mayor Jerry Demings said something surprising.
Demings, a Democrat who was running for re-election, was meeting with the Orlando Sentinel editorial board, which asked Demings whether he thinks state law should be changed to give counties the ability to spend hotel taxes on community needs like buses, roads and housing.
Florida currently forces counties to spend most of the money they raise from hotel taxes on public subsidies for the tourism industry. And Orange County, which collects roughly $300 million a year in hotel taxes, dumps most of that money into tourism advertising and a money-losing convention center that’s the size of the Pentagon.
But Demings told the Sentinel that counties already have flexibility with the hotel tax, which is also called the tourist development tax.
“In terms of roads, we can use the TDT dollars currently for roads within the tourist corridor to support that area,” Demings said.
It was a startling comment. Because the Demings administration has repeatedly claimed that Orange County cannot spend its hotel taxes on roads.
Three years ago, for instance, Demings pushed a plan through the county commission to give up to $125 million to Universal Orlando for a new road. Demings’ staff insisted that Orange County could not use hotel taxes to pay any of that tab; the county decided to pay Universal with property taxes and impact fees instead.
And earlier this year, Demings persuaded county commissioners to put a referendum on the November ballot asking voters to raise the county sales tax from 6.5 percent to 7.5 percent in order to pay for transportation needs. Just before that vote, Demings tried to cut off any objections by having his top deputy tell county commissioners that hotel taxes were off limits.
“Another question that has been raised as part of this process is, ‘Can we use tourist development tax funds to pay for these transportation improvements?’” County Administrator Byron Brooks told commissioners during that April 26 meeting. “No, we currently cannot use tourist development tax based upon the definition in the statutes.”
Somebody’s lying.
A spokesperson for Demings said that Demings doesn’t really think Orange County can spend hotel taxes on roads. The spokesperson claimed that, when Demings told the Sentinel that “we” can, he was referring to other counties in Florida — but not Orange County.
Yes, the mayor’s position here is that “we” didn’t include me or the county I run.
But I think the Demings administration is actually lying when it claims that Orange County cannot spend this money on roads (or buses or trains). Because it can. The only reason it doesn’t is that a bunch of big tourism businesses and campaign contributors like Universal want the county to keep plowing all that hotel-tax money into advertising and the convention center.
As you can probably guess, there’s quite a bit of nuance here. I’ll walk you through it all in just a bit, and you can decide what you think for yourself. (It’s also worth knowing the full backstory because it illustrates just how much influence the tourism industry wields, both in Tallahassee and in Orlando.)
But whichever side you come down on here, Demings was dishonest to someone.
And it’s not the first time.
I mentioned earlier that Demings and the Orange County Commission voted three years ago to give up to $125 million to Universal to pay for a new road that will serve Universal’s future “Epic Universe” theme park. Most of that money — $100 million — will come from county property taxes, a source of revenue that counties are usually free to spend on whatever they think is most critical, from housing and healthcare to police and parks.
Opponents of the deal with Universal — which is owned by a corporation that turned a $14 billion profit last year — pleaded with commissioners to spend that money on broader community needs, like affordable housing or support services for low-wage tourism workers. But Demings’ staff told county commissioners that their hands were tied.
But now Demings is asking Orange County voters to trust him enough to raise the county sales tax from 6.5 percent to 7.5 percent — which would cost the average resident an extra $390 a year.
There’s no doubt that Orlando has a ton of transportation needs. And the sales tax increase, which would raise an estimated $600 million a year in revenue, would probably pay for a bunch of important stuff — like a bigger and more reliable bus network.
But the sales tax is also a regressive source of revenue that takes a bigger bite out of lower-income people than wealthier folks. Sales taxes are so notoriously regressive that the IRS has an entire education section on its website explaining why.
Raising local sales tax will also ease pressure on Demings and other local leaders to actually stand up to Big Tourism on things like spending hotel taxes on local needs. And county leaders also haven’t given any assurances that they’ll unwind any of the other giant tax subsidies they give to tourism — like a special tax district that siphons property taxes away from broader community needs to pay for...wait for it...transportation projects in the tourism corridor.
In fact, you know who seems to love Demings’ plan to increase the sales tax?
Universal Orlando...which just happens to be lobbying to build a high-speed train route connecting its parks with Orlando International Airport — an idea that could cost $1 billion more than a route running from the airport directly to Walt Disney World.
Universal, which has received a bunch of big favors from the Demings administration, is by far the largest donor to Demings’ sales-tax campaign. Campaign-finance records show Universal has contributed $100,000 in cash and $45,000 in polling to the campaign, which has raised about $700,000 overall. No other donor has given nearly as much.
Jerry Demings has shown he won’t say no to Universal.
But maybe Orange County voters should say no to Jerry Demings.
Epilogue: So…who’s right?
Okay, let’s get into the weeds on whether Orange County really can spend hotel taxes on transportation projects.
Like I said earlier, Florida sharply restricts how counties can spend hotel taxes under laws that the tourism industry lobbies hard to keep in place.
But in 2018, the Legislature passed a bill that allows counties to spend a portion of their hotel taxes on infrastructure projects that support the tourism industry — including transportation projects like roads.
This law was championed by Rep. Randy Fine, a Republican from Brevard County who is probably better known for threatening to shut down the University of Central Florida and calling a Brevard County School Board member a “whore.” (As Shrek once said, “Ogres have layers.”)
But there’s a catch. Just before this bill passed, the Legislature threw a last-minute restriction into it. That restriction says a county can only spend hotel taxes on infrastructure if it already uses at least 40 percent of the money “to promote and advertise tourism.”
Fine said this amendment came from lobbyists representing the Central Florida Hotel & Lodging Association, a front group for Universal, Walt Disney World and other hotel owners. (Matt Gaetz once made a similar bargain with Big Tourism when he fought to let counties spend hotel taxes on lifeguards and beach patrols.)
The Demings administration says this provision disqualifies Orange County, because Orange County spends about 30 percent of its hotel taxes promoting tourism.
But that only counts the money that Orange County gives each year to Visit Orlando, the region’s tourism advertising agency. The county also spends tens of millions of dollars annually on its convention center.
And the same section of state law says that promoting and advertising tourism includes money that is spent on a “venue” for which “one of its main purposes” is “the attraction of tourists.” (It’s a bit clunkily written, but you can find the exact language in 125.0104(5)(a)3.)
The entire reason Orange County built its convention center — and the reason it keeps expanding the 7-million-square-foot facility — is to attract out-of-town visitors who stay in hotels, party in theme parks, and eat in restaurants.
If you count the convention center spending, Orange County devotes far more than 40 percent of its hotel tax to promoting tourism.
So Orange County has chosen to rule that it can't spend hotel taxes on transportation...even though the mayor said we can...before his staff said we can’t.
The truth is that the only thing stopping Jerry Demings from spending hotel taxes on transportation is Jerry Demings.
Excellent commentary. Ex;posing the "mysterious" Tourist Development Tax.