Transportation Trust Fund/Local Option Fuel Tax FAQs
The Pinellas County’s Transportation Trust Fund (TTF) is a special revenue fund designated by Florida Statute for the operation and maintenance of transportation facilities and certain drainage infrastructure. Every county in the state has a Transportation Trust Fund in place to receive fuel taxes from the State of Florida for local use.
The taxes on fuel, including Federal, State and County levies are commonly referred to collectively as the “gas tax.” The County’s local levy on fuel is also known as the Local Option Fuel Tax (LOFT).
The proceeds from the fuel tax are shared between Pinellas County and its municipalities through an interlocal agreement. The County retains 60 percent of monthly collections and the municipalities share the remaining 40 percent.
Pinellas County uses the TTF to fund road and right-of-way maintenance (examples: pothole patching, roadside mowing), bridge maintenance and operation, striping, sidewalk repair and construction and certain maintenance of ditches, culverts and other drainage structures. The “Ninth Cent” of the tax pays for traffic engineering, traffic signal operation including Advanced Traffic Management System/Intelligent Transportation Systems (ATMS/ITS) and traffic control signage.
The Transportation Trust Fund is primarily funded by state and local fuel taxes. Resources to support these activities are provided from fuel taxes collected and distributed on a shared basis to all Florida counties by the State of Florida and by local option fuel taxes levied by Pinellas County.
Two local option taxes are currently levied by the Pinellas County Board of County Commissioners. The first is a 1-cent per gallon levy that began in January 2007 and is dedicated to the installation, operation and maintenance of the ATMS/ITS smart transportation system. The other local levy is a 6 cents per gallon tax that is shared between the County and all municipalities within Pinellas County.
For Fiscal Year 2021, Pinellas County expects to collect $27.5 million. Maintaining the current level of service for the transportation, sidewalk and drainage programs supported by the fund is expected to cost $36.6 million in FY21.
All motorists, including residents and visitors, who purchase fuel in the State of Florida contribute to the state’s portion and all motorists who purchase fuel in Pinellas County contribute to the local portion.
How does the amount of money that Pinellas County collects for the Transportation Trust Fund compare to other counties in the state?
As of May 2021, 36 Florida counties, including Pasco, Manatee and Sarasota, levy more than 7 cents per gallon in local fuel taxes. Nineteen counties, including Pinellas and Hillsborough, levy 7 cents per gallon and 12 counties levy less than 7 cents per gallon.
The revenue the fund receives is based on the gallons of fuel purchased, not the price of gas. The growth of revenue is limited because vehicles have become more efficient and state law does not allow local fuel taxes to be indexed to inflation. While the taxes have remained consistent, the cost of the programs supported by the fund have increased due to inflation. Revenue was also impacted by COVID-19 due to a significant decline in fuel usage during the pandemic.
Vehicle fuel efficiency improvements, the increased adoption of alternative fuel vehicles and reduced miles traveled are the major factors contributing to decreased conventional fuel use in vehicles.
Pinellas County has the authority to impose an additional 1 to 5 cent tax per gallon of fuel sold within the County. By statute, proceeds would have to be shared with municipalities. If the full 5 cent local fuel tax is approved, it would collect an additional $15 million per year, $9 million of which would be the County’s share.
A one-time subsidy from the County’s General Fund budget is also being recommended to address the backlog in sidewalk repair projects. Other strategies include freeing up maintenance money by shifting capital improvement projects to a specifically dedicated funding stream, using the expected dollars from the federal American Rescue Plan Act of 2021 to reimburse lost revenue due to COVID-19 and the repayment of Transportation Trust Fund loans to the Penny for Pinellas program.
The additional money collected may only be used for the construction of new roads, the reconstruction or resurfacing of existing paved roads, the paving of existing graded roads or other expenditures that are needed to meet immediate local transportation problems or are critical for building comprehensive roadway networks. Routine maintenance is not considered an authorized expenditure for this additional revenue. However, the new revenue would allow existing revenue to be reallocated to maintenance.
If the local fuel tax is increased by the full 5 cents, it is estimated to cost the average driver an additional $27 per year. This is based on the Federal Highway Administration’s estimated average miles driven per year of 13,500 and vehicle mileage of 24.9 miles per gallon.
Local governments, including Pinellas County, do not currently have the authority to levy a user fee or tax on electric vehicles and must wait for state or federal guidance. And currently, only 0.5 percent of registered vehicles in Pinellas County are electric.
Several states are exploring charging fees for vehicles that use alternative power, like electricity, which is not currently subject to the state fuel tax. These fees are meant to recover revenue the state would otherwise capture through the fuel tax, had the vehicle been running on gasoline or other fuels subject to tax.
Voters approved the Penny for Pinellas. Why can’t the Penny be used to prop up the Transportation Trust Fund?
Penny funds are not eligible for maintenance expenses. Moreover, the County and our municipalities are already facing a funding gap for requested Penny projects.
The Board of County Commissioners will discuss the Transportation Trust Fund imbalance further in the June/July timeframe. If the Board decides to consider an ordinance providing for the proposed fuel tax increase, two public hearings would be held.