Tax proposal worries PCB officials

PANAMA CITY BEACH — An anti-tax proposal up for consideration during next year’s state legislative session has Panama City Beach officials worried.

Similar measures have been filed in both the state House and Senate to repeal a business tax that anti-tax boosters say is a burden, but which Panama City Beach officials say is a lifeline.

“It would cripple the city” if the tax is repealed, city attorney Doug Sale told City Council members on Thursday.

Sale said the initiative to repeal this particular business tax, popularly known as an occupancy tax or license, would drain $6-7 million from the city’s general fund, money used to pay for services like fire and police protection.

Most cities have a form of the tax, Sale said, but Panama City Beach and Panama City are two of only a few state municipalities that tax a merchant’s gross sales. Other cities measure the tax differently, such as using a flat fee based on the square footage of a business, or the number of tables in a restaurant or seats in a movie theater, for instance.

In addition, Panama City Beach does not have a municipal ad valorem tax, such as Panama City and many other towns; doing away with its 1 percent sales tax would cut into a “core” revenue source, Sale said.

“This is meat and bones, not icing on the cake,” he said.

Mayor Gayle Oberst said city officials have been following the progress of the bills, approval of which by the Legislature “would probably trigger a property tax for the city.”

“It would also affect our water and sewer rates, which are the lowest in the county,” Oberst said Friday.

City Councilman Ken Nelson said that the identical House Bill 4025 and Senate Bill 760 would be topics under discussion this week during an annual conference of the Florida League of Cities, where officials will meet to map out strategies and priorities for the Legislative session, which begins in January.

“It’s going to affect every city, but it would kill us,” said Nelson, president of both the Bay County League of Cities and the Northwest Florida League of Cities.

Council members directed Sale on Thursday to draft a resolution the council could consider in December that would express the city’s opposition to a repeal of the tax.

“It would be good to have that in our arsenal so we could fire that bullet” if the anti-tax forces gain momentum, Nelson said. “I’m hoping we can get it killed in committee.”

Sale assured council members that if the proposal ever reaches the House floor, “I imagine Panama City and Panama City Beach could fill up a busload of people” to ride to Tallahassee in opposition.