Funding Transit Without Raising Local Taxes: A Win for Tourists and Residents

How Commissioner Haskell’s January 6 Discussion Could Change the Game

January 4, 2026. By now, most know that 2025 was a challenging year for public transit in the Keys and Key West. Monroe County dismantled its fledgling transit department and Conch Connect service, while the City of Key West suspended its popular downtown circulator, the Duval Loop. Both governments blamed cuts to Federal and State transit funds, but the responsibility lies with them to plan better and not rely on these volatile sources.

The impact? Workers and residents are left stranded without reliable transit options, and tourists—77% of whom arrive by car—are forced back onto those vehicles to get around, causing congestion and parking problems. But as we enter 2026, hope rises with the upcoming City Commission meeting on January 6, offering a chance to begin addressing this crisis.

Commissioner Monica Haskell, who has persistently championed this issue since early summer has placed a Discussion Item (#34) before the City Commission. She asks, “Do we support seeking tourist tax funds to fund tourist-serving transit like the Duval Loop?” The accompanying information she provides states this will “enhance the visitor experience, alleviate congestion, and bolster the hospitality industry.”

These are compelling reasons for all Commissioners to support and vote yes.

In the story below, we explore why tourist funds are essential, how this approach could work and the legal basis for using this source of monies. We also examine how it benefits not only tourists but also workers, residents, and the hospitality industry we all rely on. We hear from business leader Paul Menta and Commissioner Sam Kaufman and explain how you can urge the Mayor and Commissioners to back this crucial initiative for our island’s future.

Why Tourist Tax Funds?

Category	Amount	Source
Monroe County TDT Revenue (FY 2024)	$61.5 million	FY 2024 Annual Report (PDF)
Transit Funding from TDT	$0	FY 2024 Annual Report (PDF)
Marketing Spend	Estimated $30–40 million	FY 2024 Annual Report (PDF)

Most of the funding for Key West Transit has come from Federal and State transit sources and grants, with the remainder from parking fees, fares, and advertising revenue. No General Fund or local tax dollars have ever been used. While staff have begun exploring other smaller innovative funding sources, these efforts will make only tiny dents in the funding gap. Relying on unstable State and Federal transit dollars has created a boom-and-bust cycle, preventing the realization of ambitious 10-Year plans. This underscores the need for a reliable, stable local funding source like tourist taxes.

Tourist Development Tax (TDT) funds come from taxes paid by visitors, not residents. Using these funds to support transit services primarily serving tourists does not increase general taxes or burden local taxpayers. Instead, it leverages the money tourists already contribute to enhance their experience and reduce congestion. This is why we also advocate exploring cruise ship disembarkation fees and more dedicated parking fees—costs largely borne by tourists.

What the Law Allows Regarding TDT Funds

In our August 31 story, Could Tourist Dollars Be the Answer to Our Transit Funding Problem?, we explored the specific legal framework governing the Tourist Development Tax (TDT) and what it permits. Florida Statute §125.0104(5)(a)(6) clearly allows TDT funds to be used for transportation systems designed to increase tourist-related business activity. This includes capital projects and services that primarily serve tourists.

Transit services such as the Duval Loop and Lower Keys Shuttle, which connect hotels, attractions, and beaches, fit squarely within this statute—especially when ridership data demonstrates their role in serving visitors. Commissioner Haskell’s information item also affirms this interpretation.

Further backing this, a Florida Attorney General Opinion AG 217-06 confirms that transportation services must be designed and promoted as part of the tourism experience to qualify for TDT funding.

This legal clarity strengthens the case for using tourist tax funds to support transit services that enhance the visitor experience while benefiting the local economy.

Some have questioned whether Tourist Development Tax funds can legally support transit like the Duval Loop and Lower Keys Shuttle. The key is that these services are designed primarily for tourists. The Duval Loop is explicitly designed to serve visitors, connecting hotels, attractions, and key destinations. In fact, City surveys have said that upwards of 80% of riders are tourists. The Lower Keys Shuttle, by running along US Route 1—the only road in the Keys—naturally serves all hotels and tourist spots. While the route itself may not change, branding and marketing can emphasize its role as a tourist-serving transit system.

Florida’s Attorney General Opinion AG 217-06 confirms that if a transit service primarily serves tourists and is promoted as part of the tourism experience, it qualifies for TDT funding. This aligns with Commissioner Haskell’s information item and the legal framework outlined in Florida Statute §125.0104(5)(a)(6).

This approach ensures that tourist tax dollars are reinvested to enhance the visitor experience, reduce congestion, and support the hospitality industry—benefiting both tourists and the local economy.

Future Use of TDT Funds?

Our August 31 story suggested that perhaps some of the $60M-plus TDT revenue collected in 2024 could be redirected. Specifically, we highlighted a portion of the $30-$40 million currently spent on marketing as a potential source. Commissioner Haskell’s information item notes that Florida Statute §125.0104 allows counties to add an additional 1% to 2% tourist tax, which would require a local referendum and approval by the county commission.

It’s not yet clear whether Commissioner Haskell is proposing to reallocate a portion of existing funds or to pursue an increase in the tax to support transit. This will likely be a key point of discussion at the January 6 meeting. Regardless, her direction signals a positive step toward securing sustainable funding for visitor-serving transit.

Benefits of Tourist-Serving Transit

Transit is a strategic investment in tourism that amplifies the island chain’s appeal and markets the free-and-easy spirit that makes the Keys unique.

• Enhances Visitor Experience: Reliable transit connecting key tourist destinations makes exploring the city and islands easier and more enjoyable.
• Alleviates Congestion: Reducing car traffic in popular areas helps preserve the charm and accessibility of Key West and neighborhoods throughout the Keys.
• Supports the Hospitality Industry: Easier movement for visitors means more business for hotels, restaurants, and attractions, and helps residents reliably get to work without the expense of owning a car.

In addition, transit can reinforce TDC messaging and branding by using participating vehicles as rolling billboards and placing TDC information on the outside and inside of buses and at stops. Real solutions paired with smart marketing amplify the island’s appeal.

Business Leader Paul Menta and Commissioner Kaufman Support Use of TDT Funds for Tourist Serving Transit

“I urge both the City and County to move quickly to make it happen.”

Sam Kaufman has long been a vocal proponent of public transit and bicycles. This past summer was no exception as he led the charge to try and save the Duval Loop. In the end it wasn’t enough, but he held City management to the task by saying he excepted them to come back in a few months with plans for new funding from TDT, cruise ship, parking and other sources to not only save the Duval Loop but to implement the long term plans that call for more and better service on all the routes. Here’s what he said when we asked him about Item #34 on the January 6 docket:

“Transportation services like the Duval Loop and the Lower Keys Shuttle are essential infrastructure for Key West. They reduce congestion, support our workforce, enhance the visitor experience, and help residents and tourists move safely and efficiently through our city. I strongly support using Tourist Development Council funding for these services, and the City should do everything it can, and as quickly as possible, to restore the Duval Loop now that service has been suspended. These transit investments also support climate resilience by reducing vehicle miles traveled, promote reduced traffic congestion in our historic downtown, and make it more realistic for working families to live and work here without relying on multiple vehicles. This is exactly the kind of smart, forward-thinking public policy that benefits residents, visitors, and our local economy, and I urge both the City and County to move quickly to make it happen.”

“Tourism Dollars Need to Support Tourism Transportation.”

We’ve been quoting Paul Menta, leader of the Shop Mom and Pop Key West business group and owner of the Key West First Legal Rum distillery for years as a proponent for better public transit, safer bike routes and affordable housing. Here’s what he had to say when we asked him about Commissioner Haskell’s initiative:

“As we step in the 2026 and we see what is hoping to be a busier tourist season, it brings a smile to my face to see more bicycles than ever all over town as people get around. The Duval Loop, which is a nice perk for tourists, cannot take money from our public transportation for the elderly and our workers. Tourism dollars need to support tourism transportation. The city could not afford to do this, and I think with the new transportation coordinator creating new routes for workers making it easier for them to get to their workplaces is just as important as workforce housing. Also, our senior citizens need places to sit and shade, and you have to have a budget for this. I believe that the Loop and the rest of the City’s transit routes should be separate entities. I travel a lot in this world and generally transportation is not free for tourism. Got to put the oxygen mask on ourselves first, keep riding those bikes!”

Paul has a point. By spending tourism dollars on tourist serving transit, it should free up money to improve the City’s other transit services. Paul has been advocating for more frequent and better spans of service, and he says the City should make this as much a priority as workforce housing. Amen!

Let’s Support Commissioner Haskell’s Initiative

Depending upon federal and state grants to fund public transit has proven foolhardy over the years. Using TDT funds is just one of a number of potential new local non-property tax or general fund sources that should be looked into. But for today, using TDT funds for tourist-serving transit and thus supporting this initiative on January 6 is a win-win, no brainer.

While the initiative requires approval by the County Commission and possibly a local referendum, it is important to emphasize that this funding approach does not divert general tax revenues. It is a strategic reinvestment of tourist dollars into infrastructure that benefits tourism and the local economy.

The City Commission should endorse seeking tourist tax funds to stabilize and expand visitor-serving transit. This is an investment in Key West’s future as a premier tourist destination and a more accessible, less congested city.

Commissioner Haskell’s question is direct: “Do we support using tourist tax funds for transit like the Duval Loop?”

The answer is a clear and resounding YES.

# # #

Contact Your Key West Mayor and Commissioners:

• Key West Commissioner Directory
• Mayor Danise “DeeDee” Henriquez: mayor@cityofkeywest-fl.gov
• Monica Haskell (District 1): DistrictI@cityofkeywest-fl.gov
• Samuel Kaufman (District II): DistrictII@cityofkeywest-fl.gov
• Donald “Donnie” Lee (District III): DistrictIII@cityofkeywest-fl.gov
• Lissette Carey (District IV): DistrictIV@cityofkeywest-fl.gov
• Greg Veliz (District V): DistrictV@cityofkeywest-fl.gov
• Aaron Castillo (District VI): DistrictVI@cityofkeywest-fl.gov

Submit an eComment: Visit the City legislative website here, look for the date of the meeting and at the far right you’ll see a button for eComment. Here’s a direct link to Item 34.

Chris Hamilton is the founder of Friends of Car-Free Key West & Duval Street/Historic Downtown, a local advocacy group championing sustainable mobility and vibrant public spaces. Subscribe to the blog and follow on Facebook, Twitter, and Substack for updates. All stories are cross posted at KONK Life News. Originally from Washington, D.C., Chris spent over two decades leading nationally acclaimed initiatives in transit, biking, walking, and smart growth for Arlington County, VA’s DOT. Since moving to Key West in 2015, he has embraced a car-free lifestyle downtown, dedicating his time to non-profits and community projects. Explore all Streets for People column articles here.