Collier County Officials Weigh Two Tax Increases Amid Amendment 3 Concerns

Collier County could see a return of a sales tax next year, as Collier County Commissioners discuss ways to make up potential revenue shortfalls with Amendment Three up for consideration in November.

The measure, which would increase property tax exemptions on homes upward of $250,000 in assessed value, would cost communities across Florida millions in annual revenue used to fund basic projects and services, according to data from the Office of Economic and Demographic Research.

To combat this potential outcome, the Board of Collier County Commissioners, alongside the Marco Island City Council, floated the idea during a joint workshop on Aug. 27 of returning the 1% surtax that was implemented between 2019 and 2024. Passed by a narrow margin, the tax was put in place to raise funds for county infrastructure projects, but the new tax would go to close budgetary gaps that’d be caused if the amendment passes.

Given the general attitude around tax increases, some commissioners noted that they would need to make an aggressive and well-thought-out presentation to the public to emphasize the need for the increase. They cited the recent bond referendum on Marco Island, which is set to raise taxes on residents to fund necessary bridge repairs and passed by a single vote.

“If you look at the atmosphere around taxes, it’s a whole lot worse now than it was in 2018, so it’s probably not going to get much better over the next year. So it’s a tough sell. I have no problem considering placing it on the ballot; I’m sure the county commission will entertain that thought over the next year or two, but it needs to be something that’s well-thought out,” said District Three Commissioner Burt Saunders.

The measure would not be up for consideration on the ballot until 2027 or 2028, commissioners said, as another tax proposal is being put forward this November, and some felt they didn’t want to burden voters with two different tax-related items, given how difficult it is to pass such measures.

Up for consideration this year is a measure that would increase the Collier County Tourist Development Tax from 5 to 6%. Currently, the tax generates around $50 million annually in revenue for the county. Officials said raising the tax would also offset potential losses if Amendment Three passes in the fall.

“With Amendment Three coming up, we’re going to need new revenue sources. This one catches our eye because it’s also heavily used by tourists, visitors, and guests who spend money here, so the burden is spread out,” said Darrin Palumbo, chairman of the Marco Island city council.

The tax would impose an estimated $4.68 increase on per-night stays in the county in hotels and rentals under six months. Initially proposed by Saunders, the tax would generate additional revenue to expand the Paradise Coast Sports Complex with additional fields and indoor facilities. He said the sports park has been a major source of tourism for the county, with thousands of families coming from across the country and staying at nearby hotels both in and out of season, and that continuing to bolster the asset would be a great long-term benefit.

According to commissioners, roughly 60% of revenue would likely go toward the park, though no allocations have been solidified.

Marco Island City Council member Deb Henry argued for investing in the park, as more tourism would generate more tax revenue that would benefit the island.

“We have our nice little bubble here on Marco … and I think in the Marco bubble we don’t realize the intensity of tourism outside our island. You could have four thousand families there playing lacrosse from all over the country, and I just don’t think the folks on Marco recognize the intensity of not just people going to the beach but getting hotel rooms to go to athletic events because you can play lacrosse in January, February, March and it’s absolutely lovely,” Henry said.

“The money that’s being spent isn’t per se how to bring more people, more tourism to Marco. Because of the tourism through Collier County, we can benefit from that money.”

Commissioner Rick LoCastro of District One also found benefits in the park investment, though he wanted to inform the public that, despite some referring to the increase as a ‘sports park tax’, surveys would need to be conducted and allocations made in public meetings to determine if the money could be used to fund the park as a valid use of the county’s tax dollars.

“Even if one, two, all of us wish to make the sports park the key benefactor of this tax, we all have to decide that. So, it’s not like it’s passed in November and millions are automatically thrown at the sports complex,” LoCastro said. “How it’s spent still needs to be presented and agreed upon; it’s not an automatic thing.”

Not every Commissioner was in favor of the tax measure, however, with some still leery of broader economic conditions they believed would prevent people from voting for it, and feeling there was no concrete plan for where the money would really be invested.

“I have to share aloud that I’m not in favor of it; I wasn’t in favor of it before. It did do an enormous amount of good for our community because of the dedication of those funds, that it was stipulated where they were going to be invested, but I think with the climate we’re currently in and the unknowns we’re all about to face … I’m going to have to wait so see what’s going to in fact transpire here,” said District Five Commissioner William McDaniel Jr.

The county is hosting a series of 12 public informational meetings about the tax increase for those who wish to ask questions directly to commissioners and government officials. Marco Island will have its meeting on Sept. 30 from 6-7:30 p.m. in the Marco Island Community Room at the police headquarters on 51 Bald Eagle Dr. The remaining dates and locations are available online at the county’s website.