Sarasota County Schools sue tax collector over multi-million-dollar funding dispute

The Sarasota County School Board and two county taxpayers have filed a lawsuit against Tax Collector Mike Moran and the constitutional office he controls alleging “unlawful diversion” of taxpayer funds that were supposed to support local students.

The suit was filed Friday in the Circuit Court of the 12th Judicial Circuit in Sarasota County. 

At the center of the dispute is a recent change by Moran in who pays the cost of collecting a voter-approved property tax that raises millions of dollars each year for Sarasota County Schools. This is on top of the money generated through the school board’s regular property tax. 

For more than two decades, Sarasota County covered those costs, allowing all of the tax revenue to go directly to schools to help pay for teachers, support staff and equipment. Moran has instead begun taking that fee out of the school district’s share of the funds — a move the school board says voters never approved and that has already diverted more than $2 million away from classrooms. That figure is expected to grow over the coming years.

The sudden change comes as the district is already grappling with budget pressures caused by declining enrollment and the expiration of federal COVID-19 funding relief, resulting in the recent elimination of 136 teaching positions.

Sarasota County Schools Superintendent Terry Connor | Chloe Nelson, Your Sun

“That’s not an insignificant amount when the taxpayers thought it was all going to the schools,” Superintendent Terry Connor told Suncoast Searchlight, adding that $2 million already diverted could pay the salaries and benefits of about 20 teachers.

The roughly $2 million already withheld represents only a portion of what could ultimately be at stake. That amount covers just a fraction of the current five-year voter-approved tax period, which is the subject of the lawsuit, meaning the disputed fees could total many millions more in the years ahead. 

The district also argues the tax collector’s office gains control of the funds — and any interest earned on them — before excess money is returned.

How the dispute began

Moran, who took office in January 2025 after defeating incumbent Barbara Ford-Coates, formally challenged the arrangement in July, when he sent a letter to Connor and Sarasota County Administrator Jonathan Lewis arguing that state law does not allow Sarasota County to pay the collection fees on behalf of the school district. 

Two months later, the County Commission voted to stop covering those fees, shifting the expense to the school district.

The school district vehemently disagrees the past arrangement was against the law, arguing the state statute Moran cites applies to taxing districts and special assessment districts — not public school systems.

“This fact was supported by two decades of settled law and practice of every penny of the voted millage going to Sarasota County schools,” Dan DeLeo, an attorney with Shumaker, Loop & Kendrick who represents Sarasota Schools in the lawsuit, wrote in the complaint.

The lawsuit argues that voters approved the tax with language requiring the money go directly to the district — not toward “the enlargement of the Tax Collector’s own budget.”

The complaint points to a more than 34% increase in the Sarasota County Tax Collector Office’s budget last year. Moran has said the increase is largely driven by the need to update obsolete computer systems.

Joining the district in the lawsuit are Sarasota County residents Brian Joseph Dunn and Lori Verier, who are also named as plaintiffs. Verier referred questions to the school district while Dunn was not immediately available for comment.

The Sarasota County School Board is suing Tax Collector Mike Moran and the constitutional office he controls alleging “unlawful diversion” of taxpayer funds that were supposed to support local students. | Suncoast Searchlight illustration based on the actual lawsuit

How the collection fees work

State law allows tax collectors to initially withhold a 2% commission from property tax revenues but requires them to later return any amount above the actual cost of the work.

In an April 17 letter to Connor that was shared with Suncoast Searchlight, Moran called the roughly $2 million figure a “discrepancy” and said the actual cost of collecting the special school revenue would ultimately total $800,000 after excess funds are returned to the school district. 

Sarasota County Tax Collector Mike Moran | Photo courtesy of the Office of the Sarasota County Tax Collector

But Connor said he is concerned that the amount kept by the tax collector’s office could grow as Moran’s budget increases, since the collection fee is tied to the office’s actual operating costs.

Connor also said the district is already dealing with the immediate impact of the withheld funds. Even if some of the money is eventually returned, he said, the district was forced to make cuts because it didn’t know how much revenue would ultimately be available. 

Moran told Suncoast Searchlight that the Manatee County Tax Collector has taken a similar position to his office and has sought a legal opinion from the Attorney General on the matter.

“We respectfully suggested that the School Board wait until the Florida attorney general issued its opinion on the matter which would save taxpayer money, but apparently they would rather spend money on attorneys than the children,” Moran told Suncoast Searchlight.

Connor said that many agencies seek opinions from the Attorney General’s Office and it’s not certain the office will even weigh in.

“We’re at a point,” Connor said, “that students aren’t getting the resources they are entitled to.”

Derek Gilliam is a watchdog/investigative reporter for Suncoast Searchlight. Email him at derek@suncoastsearchlight.org.