No, not as currently proposed. While utility taxes can be a revenue source for municipalities, the feasibility report showed a balanced general fund budget without a utility tax. The report provides budget projections as a baseline – contemplating current service levels for current dollars – using existing revenue sources that would return to the community. If citizens ultimately want increased service levels, it would cost more. But those dollars would stay in the Perdido community. Again, the August 2023 report showed a 5-year balanced budget to be feasible using only existing revenue sources. The study will be updated in December 2023 to reflect new tax information just now becoming available. The study firm may provide additional clarity and guidance with regard to utility tax.

Escambia County, as a constitutional county (non-charter), is not authorized to collect utility taxes. In many ways, this creates a problem, as unincorporated county residents are primarily taxed on the value of their property rather than their consumption. This unfairly shifts the tax burden to homeowners whose property value increases. As property values go up, as they have in recent years, property owners are hit with higher tax bills. Even those with homestead exemptions are virtually guaranteed a locked-in 3% annual ad valorem increase. The reason municipalities would consider municipal service taxes is because it is considered a more balanced and fair approach that helps reduce the ad valorem tax burden from homeowners.

In conclusion, municipalities are authorized to collect municipal service taxes, which helps alleviate the strain of ad valorem property taxes. The August 2023 report showed 5-year balanced budgets without the need for a utility tax. December 2023 updates will clarify if this is still the case.