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Facing the possibility of increased taxes elsewhere, Marco Island residents will see a little more money in their wallets from their TV and phone bills next year.

The Marco Island City Council has approved a resolution that will decrease the local communications services tax, which covers services like television, streaming video and phone, by a 5-1 vote.

The Communications Sales Tax is comprised of both a state and a local component, which Marco Island has utilized since 2001.

At that time, the city adopted the tax at 5.42 percent before reducing it to 5.22 percent the following year.

Since then, the tax has gone unchanged and compared to other nearby taxing entities, Marco Island has been paying one of the highest rates.

Only the city of Naples has had a local communications sales tax as high as Marco Island since 2010 when it raised its rates from 3.3 percent to match Marco Island’s rate.

Under the terms of the resolution, the city will phase-in the reduction of taxes as it lowers the current rate to 3.9 percent on Jan. 1, 2019. The tax would then be lowered to 2.1 percent on Jan. 1, 2020.

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Marco Island City Council Chairman Jared Grifoni proposed the reduction in taxes last month and found that the city has benefited from the tax because revenue collections were much higher than its budget estimates.

At the time of the first reduction of taxes, Grifoni said the city was estimated to collect $250,000 and $450,000 in 2002 and 2003, respectively. Instead, it collected more than $672,000 and $890,000 in those years.

Over the past three years, the city has collected an average of $881,074 annually.

The reduction in taxes comes at a time when voters may elect to raise taxes in two different areas.

On the upcoming ballot, Marco Island voters will decide whether to impose an additional $100 per $500,000 taxable valuation if they want the city to have local control of EMS services and increase the number of ambulances in the city.

Voters in Collier County will also decide if they wish to increase the sales tax from 6 to 7 percent. 

The Collier County Board of Commissioners has picked out 18 major projects to use the proceeds that fall into three categories:

  • Expanding roads and bridges
  • Buying new facilities, equipment and parks
  • Four one-time “community priorities”

“This is an opportunity for the council to get ahead of those and show the citizens that we’re committed to lowering their taxes,” Grifoni said. 

Based upon the new local communications sales tax rate, the city would need to find an additional $215,000 in revenue to offset the reduction in taxes, which was one of the points brought up by Councilor Howard Reed, who cast the lone dissenting vote.

“If all we’re doing is reducing tax here and raising here by an exact commensurate amount, I think it’s just political show and doesn’t help our citizens out,” Reed said. 

Both Councilor Larry Honig and Grifoni noted that the city’s property taxes were expected to increase, which would help provide the city additional revenue.

Reed also said the reduction of taxes could have an effect on some of the city’s general obligation revenue bonds, specifically the bond for Smokehouse Bay Bridge.

“We may be below a threshold, which may mean we’re going to have to resolve that issue in some other way,” Reed said. “I think the timing on this is what’s wrong. We need to wait to identify how we’re going to pay for it and then vote on it.” 

Councilor Bob Brown was absent from Monday’s meeting.

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