CHIPLEY -— Washington County officials are hoping a 5-cent gasoline tax will help generate the revenue needed to help pull the county out of staggering debt.
The tax, commonly called the ELMS Nickel, allows counties to levy a fuel tax of up to 5 cents with a supermajority vote from the Board of County Commissioners.
The revenue — projected to be about $458,000 a year — would be distributed between the county and its municipalities through an interlocal agreement. Of that amount, the county would receive about $400,000 and the rest would be split between the cities.
Interim Clerk of Court Harold Bazzel said the idea is to earmark revenue from the levy to fund road projects as allowed by the state, thus freeing up other funds to pay the county’s debts.
“Washington County is in serious debt,” said Bazzel. “It didn’t get this way all at once, so our commissioners inherited a mess. There’s been a cycle of spending and borrowing since sometime in the ’90s, and it needs to stop.”
Notes owed by the county total more than $8.2 million.
One of those debts owed to SunTrust Bank is for a $5.5 million sales tax promissory note used for various projects, such as renovations to the county offices on South Boulevard. Washington County has paid only interest on that loan since 2009, an amount projected in this year’s audit to be about $280,000.
The terms of the loan state its principal is due Oct. 1.
“Over the years, the county has been trying to borrow away the debt,” Bazzel said. “And come October, the bank could call that note.”
Bazzel contracted with former Leon County Financial Director Bill Bogan to help address the problem. Bogan assured residents the county is working to identify and address its budgetary issues, and the note won’t be called.
“We’re not going to let it get to that point,” Bogan said. “We hope to renegotiate that note with the bank and begin to pay it down, as well as other debts, rather than just keep paying interest.”
County Attorney Jeff Goodman will draft the ELMS Nickel proposal, which will be presented to local municipalities for approval as well as in a public hearing.
“This is really the best option,” Bazzel said. “Instead of through raising property taxes, revenue will be generated by all residents as well as those just passing through, not just property owners.”
If the proposal is approved, the gas tax levy will take effect Jan. 1, 2015.