ORLANDO, Fla. — For the first time, Orange County can use a different tax to help boost funding for tough social issues.
State law allows only three counties to levy what’s known as a tourism impact tax added to hotel or short-term rental stays. But only one county does, and a portion of the proceeds help with affordable housing needs.
When it was implemented, however, no one had any idea how much money it would ultimately generate.
Orange County Mayor Jerry Demings is considering whether it can be done here. In part, that’s because there hasn’t been interest in expanding how the county can use the current levy for tourism development.
The purpose of the tax for decades has been to tax tourists to pay for the things they use when they come to the Orange County area.
“At the time, the hotel tax was two cents, so it would raise $2.4 million a year, now it’s almost $400 million,” Jane Healy said. “The problem now is that there is too much money for too few uses.”
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Jane Healy chaired the county’s tourism development task force, which worked to prioritize spending the money within state laws.
In Orange County, the focus is on the Orange County Convention Center, Amway Center, and Dr. Phillips Performing Arts Center, and a large portion is given to Visit Orlando for tourism marketing.
In 2023, Visit Orlando received about $107 million through TDT – nearly double what it received in 2018, just five years ago.
For perspective, the entire state of Florida spends only $80 million on tourism marketing.
Healy asked why funds remained so limited.
“I think the tourism industry wants to keep it as their own,” Healy said.
Orange County is now focusing on another tax, the tourist impact tax. It was an idea originally floated by Healy this summer when she and others met to prioritize spending on the tourism development tax.
“It’s one small component that can work if the legislation is written in a way that doesn’t hurt the industry.” I don’t support anything that will hurt the industry,” Demings said of the tourist impact tax.
Currently, three counties are allowed to levy a one percent tax on transient rental units. State law allows the tax to be collected in certain areas of critical importance to the state.
The only county that currently collects the tax is Monroe County, which is in the Florida Keys.
Monroe County Mayor Holly Meryl Rashine told 9 Investigates that revenue is split between the county’s general fund and the land authority, which buys land and in some cases builds affordable housing to help those who work and live in the Keys .
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“The ability to spend this additional funding to offset this need for workforce housing is critical,” Rashein said. “And I think it’s important to actually look at the physical name of the tax. It’s called a tourism impact tax. So this will help offset the impact that tourists have on our community – whether they’re using our water or using our roads using our services.”
Monroe County, which is a relatively small county, has collected about $13 million annually through this tax. Expanding it to other counties requires a change in state law and the support of the tourism industry.
We asked how Demings plans to generate support for expansion beyond lobbying the Florida Association of Counties.
“The devil is always in the details,” he said. “So when you start negotiating and advocating, you have to make sure that what you’re advocating for doesn’t create unintended consequences.”
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Rashine thinks it’s time for other counties to consider expanding the tax’s use for tourism development, something she says could have more support to account for the needs of all counties in the current economy.
For people like Healy, there are long-term concerns for the area as the industry protects its taxes while its own employees get away.
“They control everything,” Healy said. “I don’t know why they don’t support them. It helps them.”
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