TALHASSEE – The state’s legislative proposal to free hundreds of millions of dollars a year in tourism tax revenues has been repealed to local governments on mass transport, roads and other projects that benefit Florida residents.
The proposal was removed from the Republican-led $1.3 billion home tax package (HB 7031) at the final hours of budget negotiations after a fierce lobbying campaign by the tourism industry. Local governments would have given local governments new flexibility in how they allocate taxes that they currently have to spend to support tourism-related functions within a specified range.
The change, while residents deal with chronic traffic congestion and other stocks in public infrastructure caused by the huge number of visitors in the area, would have been impacted especially in Central Florida, as they watch tourists go instead to marketing campaigns and construction projects that are considered to support tourism, such as stadiums and event venues.
“I’m disappointed,” Orange County Commissioner Mera Uribe announced last month that she plans to run for mayor of the county in 2026.
Orange County, a tourist-rich country, earns approximately $360 million per year in tourism tax revenues. This comes mainly from the extra charges for hotel rooms and short-term rentals. Of that, about $100 million will visit Orlando, the marketing arm of the local tourism industry.
The proposal to change the use of tourism taxes, as first introduced this year by Orlando’s Democratic state senator Carlos Guillermo Smith, would eliminate the state’s requirement that local governments spend at least 40% of their room tax on advertising and marketing, known as “corporate welfare.”
Smith would have limited the amount that he needed to spend on $50 million ads, shifting some of his tax burdens to pay roads and other infrastructure around the resort corridors from locals to tourists.
Smith was defending the Sunshine Corridor using tourism tax tax tax. It proposes rail projects to expand Sunrail and merge with Brightline to connect to Orlando International Airport, Disney Springs, the Orange County Convention Centre, International Drive and other destinations.
Smith’s bill died on the committee, but important provisions have been added to both the Republican-led Senate and House tax packages. Lawmakers initially advanced the House version, but it also called for them to go further and dissolve the local governing body, the Tourism Development Council, to attract visitors.
The house version also required them to use tourism tax money to give Florida homeowners a property tax break. That drastic clause would have put a large portion of the fundraising of entertainment and sports venues like the Kia Center, home to Orlando Magic.
However, Smith said, “Unfortunately, the TDT reforms that supported this session were removed from the final tax package in Congress on the last day of negotiations between the House and Senate.”
The tax package was expected to be approved by the full Congress as early as Monday night.
Hotel and tourism industry officials said revenue from tourism taxes is key to competing in Florida with other destinations. One Tourism Bureau called for a suggestion to divert the money to “Job Killer.”
In Orange County, hotel tax use is controversial for its incredible annual haul. In the committee race last year, incumbent Uribe was challenged in part by then-state Sen. Linda Stewart, both Democrats, to fundraising issues for Visiting Orlando. Uribe wanted to visit Orlando’s $100 million budget for “haircuts,” but Stewart insisted that visiting Orlando was essential.
An agency spokesperson did not reply to requests for comment.
Orange County has a massive debt obligation supported by a total of hundreds of millions of dollars in TDT funding for projects that benefit wealthy sports teams, entertainment conglomerates and stadium sponsors. This includes an expansion of the Orange County Convention Center, improving the FBC Mortgage Stadium on the University of Central Florida campus, and an upgrade to the KIA Center and Camp World Stadium.
TDT’s fundraising is also used to help build the Dr. Phillips Center for the performing arts and attract major events like the NFL Pro Bowl to the region.
In April, the Orange County Commission voted to spend $29 million on the tourism tax fund to lure WrestleMania into the area and steer the NFL in 2027 to the NFL to allow Jacksonville Jaguars to play at Camp World Stadium.
Smith said the fact that his proposal was very close to passing proved that there was widespread support behind changing the law to allow for the flexibility of hotel taxes to fund community needs like public transport.
He said the coalition is growing to change the law and includes bipartisan support.
“The progress we made in this session will breathe new energy into the TDT reform movement and give us a head start for next year,” Smith said.
First-year Orange Commissioner Kelly Martinez Semrad, a UCF professor who spoke openly in favor of diversifying the use of TDT before the election, was disappointed that the state legislature chose to adopt what she called “meaningful reform.”
“We look forward to future legislative sessions that modernize the TDT taxation model for nearly half a century,” she said.
Orange County Mayor Jerry Demings did not comment Monday.
Original issue: June 16th, 2025, 3:11pm EDT
