School sales tax revenue, impact fee collections falling short of expectations

Lori Conrad, the chair of the Marion County Public School Board, right, speaks as board member Nancy Thrower, left, listens during a Marion County Public School Board meeting in the auditorium at Marion Technical Institute in Ocala, Fla. on Tuesday, April 22, 2025. [Bruce Ackerman/Ocala Gazette] 2025.

Revenue from reinstated school impact fees and the half-cent sales tax boost for educational needs is lower than initial projections, according to Marion County Public Schools staff.

The sales tax increase was approved by Marion County voters in the November 2024 general election and went into effect in January, while the collection of impact fees began in July 2024. Impact fees and the sales tax revenue can only be used for school district capital projects and infrastructure.

Some of the budget challenges have been attributed to inflation, the newly enacted tariffs and supply chain issues, said MCPS Chief Financial Officer Theresa Boston-Ellis while addressing the school board at an April 17 workshop.

In providing a financial update for the 2024-25 year, the Finance and Budget Department identified major shortfalls in the revenue that was expected from both impact fees and the sales tax, said Finance Budgeting Director Cayla Johnson.

“We had budgeted originally $15 million (in revenue) from impact fees, and that was based on projections that we were given by the growth management department,” she said. “Currently, we’ve only received about $6.5 million.”

This leaves the district short about $8.5 million from its projected goal. These funds are intended to pay the debt service for the certificates of participation the district issued for $300 million in funds to build new schools and to construct wings to existing schools.

“Any funds we don’t receive in those impact fees there that are eligible to pay that debt service, we are going to have to look to other funding areas, such as the 1.5 mills to be able to make those debt service payments,” she said.

The school district levies a special tax assessment of 1.5 mills on Marion County property owners, which is the maximum level that a district can levy to generate funds for capital projects and maintenance.

Based on projections from the Florida Department of Revenue, a half-cent sales tax was expected to generate about $40 in revenue over the course of the year. Since MCPS’ sales tax went into effect in January, by now the district had hoped to generate about $20 million by the halfway point of the year.

“We received our first payment in March, and it was $2.4 million. So currently we’re about $17.5 million short of what you guys what we had anticipated collecting at this point in time,” Johnson said.

District staff also based its sales tax revenue projections off of the county’s penny sales tax that is in its ninth year of collection. Based on those figures, the district estimated it could collect about $17 million from the school half-cent sales tax increase.

The update comes as Superintendent Diane Gullett prepares to leave her position. The school board has chosen Danielle Brewer as an interim superintendent.

“I want to make sure as I exit my role that I leave this district in the most conservative, cost-efficient manner I can,” Gullett said. “We just don’t have all the answers, but we’re really diligently working through what we do know and how we can continue to set this district up for success.”