ORANGE COUNTY, Fla. – Orange County is considering its options about how to spend its tourist development tax (TDT) revenue amid a “summer slowdown” for tourism countywide.
The county’s Comptroller Phil Diamond wrote a memo to the Board of County Commissioners on Thursday to discuss the issue.
According to the memo, the county is projecting over $350 million in TDT collections for the 2022-23 fiscal year, though Diamond urged commissioners to take a “conservative approach” toward spending those funds.
Diamond explained that TDT revenue is volatile, so while there are optimistic outlooks for future collections, the slowdown in tourism over the past few months warrants scaling back the county’s use of current funds.
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“Strong fiscal discipline and prudence from this and past Boards have allowed the County to weather all of the TDT challenges over the years and maintain our high bond ratings,” Diamond wrote. “I would urge the Board to continue to stick to the fiscal playbook that has served the County and the taxpayers so well over many years.”
Additionally, Diamond said that projections show an approximately 7.5% decline in TDT collections for the next fiscal year, though the county is expected to see a 2% growth rate in the fiscal years to follow.
As a result, if cashflows end up being higher than expected, commissioners can choose to spend that money in the future rather than dedicate it now at a greater risk.
“In other words, spending future surpluses will be far easier than dealing with future budget deficits,” Diamond said. “On the other hand, if future collections do fall short for a period of time, the County can ‘tighten the fiscal belt’ on some expenditures and use our healthy reserves to weather the downturn.”
Diamond also proposed that the county could issue up to around $800-$900 million of bonds in fiscal year 2026 for debt financing to help fund larger projects.
“To put this level of debt in perspective, this is more than the $685.2 million of existing TDT debt the County had on Sept. 30, 2022,” he wrote. “Also, $800 million is more funding than the County contributed for the Amway Center, Dr. Phillips Center for the Performing Arts and Citrus Bowl combined.”
In using all the available debt capacity, the county would also have around $15 million per year extra to allocate toward ongoing programs, Diamond said.
Orange County Mayor Jerry Demings wrote to the Board of Commissioners on Friday regarding the memo, saying that he hopes they will be ready to make a decision on Aug. 22 about how to spend the approximately $800-$900 million in TDT funds.
Demings added that he would support using that money toward county fine arts programs, the Greater Orlando Sports Commission, completing the ballroom at the Orange County Convention Center, and constructing improvements for Camping World Stadium.
“I believe this proposed use of available TDT funding for TDT-eligible projects maximizes economic benefit, job creation and return on investment,” Demings stated.
Should the county see higher TDT growth in the years to come, Deming said the county could revisit some of the other project opportunities for additional funding.
The Board of Commissioners is scheduled to meet on Tuesday, Aug. 22 to discuss the proposals.
Read Diamond’s Aug. 17 memo below:
Orange County Comptroller Phil Diamond Memo by Brandon Hogan on Scribd
Read Demings’ Aug. 18 reply to Diamond below:
Orange County Mayor Jerry Demings Memo by Brandon Hogan on Scribd
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