Fiscal Year 2023
Property Tax Revenues
Ad Valorem taxes, also known as “property tax”, account for almost 33% of the City’s total governmental fund revenue received each year. Ad Valorem taxes are levied on the taxable value of real and personal property. The State gives municipalities the authority to levy ad valorem taxes to help distribute the cost of providing government services. The taxable value, which is determined by the County Property Appraiser, is the taxable amount of the assessed value of all property in the City’s jurisdiction less homestead and any other applicable exemptions. The County Property Appraiser, each year before July, provides the Certified Taxable Value so the City can forecast ad valorem revenue in preparation for the upcoming fiscal year budget.
The State places a millage limit of 10 mills on the taxing capacity of local municipal governments. The City’s Commission determines the millage rate to be applied to the taxable value on an annual basis. The amount of total ad valorem revenue to be received is calculated by applying the taxable value to the millage rate. The amount of Ad Valorem Tax Revenue budgeted for 2023 is based on the millage rate of 5.000. The City budgets the ad valorem revenue at 95% of the calculated value to factor in the potential for reductions in ad valorem collections caused by valuation adjustments and discounts for early payment. The Martin County Tax Collector collects the tax from property owners and then distributes the revenue to the City throughout the year.
State Shared Revenue
Sharing of certain state revenues with cities and counties began in Florida at least as early as 1931. Financial rescue of the counties from their overwhelming road debts from the 1920's came principally through sharing of the state's motor fuel tax. Little sharing with cities occurred until the state cigarette tax collections were made available to them in 1949. The Florida Revenue Sharing Act of 1972 was a major attempt by the legislature to ensure an equitable distribution at a minimum level of revenue across counties and municipalities.
The current structure of the revenue sharing program has three revenue sources for municipalities:
Cigarette tax, one-cent municipal gas tax and the state alternative fuel decal user’s fee. There are several criteria a local government must meet to qualify to receive funds. Governments must: Levy ad valorem taxes (excluding debt service and other special millage) that will produce the equivalent of three mills per dollar of assessed valuation or collect an equivalent amount of revenue from an occupational license tax, or a utility tax (or both) in combination with the ad valorem tax. Other requirements include annual audits of financial statements and certification of compliance with TRIM (TRuth In Millage).
Local Government Half-Cent Sales Tax
The State utilizes the Local Government Half Cent Sales Tax Program. The program includes three distributions of state sales tax revenue collected. The ordinary distribution to eligible county and municipal governments is possible due to the transfer of 8.814 percent of net sales tax proceeds to the Local Government Half-cent Sales Tax Clearing Trust Fund. The emergency and supplemental distributions are possible due to the transfer of .095% of net sales tax proceeds to the Trust Fund. The emergency and supplemental distributions are available to select counties that meet certain fiscal-related eligibility requirements.
Like the sales tax itself, the proceeds from the sales tax distributed to local governments are subject to cyclical variations based on the level of economic activity within the particular month. The sales tax on goods is 6%. The current rate in affect for Martin County is 6.5%. The 2023 budget is based upon estimates provided by the State of Florida.
Pursuant to F.S.166.231, the City levies a utility tax, or public service tax on the purchase of electricity, metered or bottled gas and water service. The City levies this tax at the state allowed maximum of 10% for all services The City budgets for the Communication Services Tax revenue based on an estimate provided by the State of Florida. Collections from these taxes vary depending on utility usage. The water and electricity utility tax depend to a great extent on weather conditions. Fluctuations may be experienced from these revenue sources which are beyond the ability of the City to predict or control. The budget for utility tax is based on historical trends. Recent revenue trends have been positive. Electricity, gas, and water utility taxes have exceeded budget expectations.
Public utilities operating within the City must pay to the City a franchise fee in return for the right to do business within the City and for the right to use public rights-of-way. The budget for franchise fees is based upon historical trends.
Licenses and Permits
This revenue source derives from fees applied directly to specific properties to recover costs associated with building within the City of Stuart. This category includes building permits, inspection fees and plan review fees. Licenses and permits are charged based on a fee schedule. Permits must be issued to any individual or business that performs construction work within the City of Stuart. Permits are issued for building, electrical, plumbing, and mechanical construction. The revenue from building permits fluctuates based upon current economic conditions and major construction projects. The revenue estimated for permits and fees takes into consideration both the anticipated construction for the budgeted year and the amount collected in the prior year.
Business Tax Receipts
Any person engaging in or managing any business, occupation or profession, within the limits of the City of Stuart must have a license and pay a Business Tax. All licenses must be secured at the time the business begins operation and are renewed thereafter each October 1. The fee for each license is based on the business in which the entity is engaged. The budget for business tax receipts is based upon historical trends.
The City owns several real properties which are leased or rented for public and private ventures. Azul, the Triangle parcel, were completed in 2019. The City purchased 301 Ocean (Courthouse Commons) late in 2020.
Enterprise Funds - Utility Revenues
The City's Enterprise fund revenues are budgeted based closely to our 5-Year Rate Study program performed by an outside consulting firm. This comprehensive rate study incorporates projected levels of user rate charges for all of our water and sewer related services, our solid waste collection and disposal services, and our stormwater management programs.