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Collier County is projecting millions in reduced income from its local sales tax, state-shared revenues and tourist tax dollars because of the coronavirus pandemic, County Manager Leo Ochs told commissioners during a budget workshop Thursday.

State sales tax, one of the revenue sources the county relies on to fund its general fund, is forecast to be down by $9 million in the current fiscal year, which ends Sept. 30.

The county has budgeted for $3 million less in state sales tax revenue for fiscal 2021, which runs from Oct. 1 through Sept. 30, 2021, as a result of the impacts of the pandemic.

Revenue from Collier's one-cent sales tax, which voters passed in 2018, is forecast to be $21.6 million below budget in the current fiscal year. Regular new sales tax-funded projects have been on hold since February, according to a county presentation.

Those revenues are budgeted 10% less, at $77.9 million, for the upcoming fiscal year, Ochs said.

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General state-shared revenues were reduced recently by the state by half, from $1 million to $500,000 per month, resulting in a year-end revenue loss of about $2 million below the county's forecast. 

Tourist tax revenues for the current fiscal year are below the budget forecast by $8.2 million. "Fortunately you have a very healthy reserve and a strong cash position in your family of tourist tax funds," Ochs told commissioners.

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Department revenues from parks and libraries fees are down about $1.2 million in the current fiscal year.

"County government generally is expected to incur about an additional $1 million of expenditures in the current fiscal year for additional equipment and services related to the COVID-19 pandemic," Ochs said.

The financial hits for the county came after the local economy was initially thriving from October through February. 

Employment levels were at record highs and bellwether industries were performing well. Collier had the highest median income in the state, and the county's general revenues and tourist tax revenues were tracking well above the county's budget plan, Ochs said.

Countywide general fund taxable property values for calendar year 2019 increased about 5.7% and the countywide taxable property value is now at the highest level it's ever been at $98.5 billion, Ochs said. (That number is as of Jan. 1. The county will receive an updated number in early July, but if there are any coronavirus-related effects those wouldn't be reflected until next year.)

Then the pandemic hit.

March through May unemployment skyrocketed as businesses were ordered to close and non-essential personnel asked to stay home.

Some of the hardest hit sectors include the hospitality and restaurant industries with 11,500 overnight visitors in April 2020, down 92% year over year. 

For the January to April period overnight visitors were down 26% over the same 2019 period, according to the county. Direct visitor spending for April was $13.8 million, a 94% decrease over April 2019.

"It has a devastating impact on our local hospitality and food service industries," Ochs said. 

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Nonetheless, county officials expressed optimism Thursday about county government's financial health despite the pandemic-related setbacks. 

Because of the way the county has positioned the budget over the years, it is able to absorb "these kinds of fairly sudden economic changes," Ochs said.

"Our crystal ball says that, you know, barring a huge surge in confirmed coronavirus cases or, you know, a series of significant natural disasters, we think that the recovery for our economy remains positive in terms of the outlook for fiscal year 2021," he told commissioners.

That's because, Ochs said, the county population continues to grow at about a 2% rate each year, the county's public infrastructure has been positioned to accommodate economic growth, and state officials are predicting that the three-year forecast for taxable property values in Collier "continues to trend upward."

"Those are good signs for the long-term recovery of the economy," he added.

Collier is also in line for millions in federal coronavirus aid, some of which, county staff suggest in commission meeting documents, could be spent on "individual, family, and business grants to help speed recovery and fill gaps in assistance that has been provided" so far.

Commissioners are expected to discuss those decisions next week, but for some the direction to take was clear on Thursday. Commission Chairman Burt Saunders said he would like to see the money go to individuals that need it rather than reimbursing the local government for expenses it incurred.

"My view is that we need to get all of this money that comes in through the (Coronavirus Aid, Relief, and Economic Security Act) into the communities that need services," he said.

Commissioners will set the county's tentative property tax rates at their July meeting.

County staff have recommended to keep the same rates as last year, which would mean a tax rate for the general fund of $356 per $100,000 of taxable value. And a tax rate for the unincorporated area general fund of $81 per $100,000 of taxable value.

Homeowners who live in unincorporated Collier pay both the general fund tax and the unincorporated area general fund tax. Collier homeowners who live in cities, like Naples or Marco Island, pay the county's general fund tax and their city's property tax.

The levy won't be officially set until the county holds two public hearings in September.

Connect with the reporter at patrick.riley@naplesnews.com or on Twitter @PatJRiley.

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