Florence council adopts ordinance raising sales tax to fund roads, increases bed tax

The Town of Florence on Tuesday approved Ordinance 780-26 to raise the local transaction privilege tax from 2.0% to 3.5% and increase the bed (hotel) tax from 2.0% to 5.0%, a measure council said is intended to address a growing transportation and infrastructure funding shortfall.

Town staff told council that a combination of reduced state-shared revenues and sharply higher construction and materials costs has left the town facing mounting capital needs. "We have identified roughly a $43,000,000 gap in trying to pay for [road] projects even with our most optimistic assumptions," Vice Mayor Adam said during the presentation, noting that the council will isolate the revenue into a dedicated transportation fund so residents can see how the money is used.

The ordinance, as written and presented, sets the new rates and includes dedication language: 1.0 percentage point dedicated to a transportation fund and 0.5 percentage point to the general fund. Town counsel clarified that the ordinance itself fixes the rates and the council need only approve the ordinance as written unless it amends the text.

Council members expressed the trade-offs of the decision. "Nobody is wanting to have to pay more taxes," Councilmember Bucellado said, acknowledging the impact on residents on fixed incomes, but adding that delays in projects often increase costs. Councilmember Bushelano, who said she attended the town's outreach open houses, described the increase as an investment to finish roads sooner rather than later.

Vice Mayor Adam moved to approve Ordinance 780-26 with specification of where the 1% TPT (transaction privilege tax) goes; Councilmember Maldonado seconded. The town clerk called the roll: Vice Mayor Adam — aye; Councilmember Maldonado — aye; Councilmember Neal — aye; Councilmember Bucellado — aye; Councilmember Vincina — aye; Councilmember Bedford — aye; Mayor Eaton — aye. The motion passed unanimously.

According to the ordinance language presented to council, the changes take effect on July 1, 2026. The council and staff said they will publish the list of identified road projects and monitor the dedicated fund to ensure the revenue pays for the transportation priorities discussed during the Florence Forward outreach.

The council thanked staff for public engagement and noted residents asked questions both online and in open houses. No separate public comment produced legal or procedural challenges to the ordinance during the meeting.