Property Tax Reform
Property tax is the largest
governmental resource in
Florida. |
Why Does it Matter? |
Local government and other
taxing authorities have been
able to generate increased revenues
on the backs of Florida’s employers.
Businesses have had to bear
the brunt of increased property tax
assessments as a result of the
inequities in the system. Since
growth rates are capped at 3% per
year for homeowners with the “Save Our Homes” exemption,
local governments have turned
to businesses to make up the
difference.
The availability of affordable
housing is also greatly affected by
rising property taxes. Businesses are
having a difficult time recruiting
qualified employees to Florida
when property taxes make the price
of a home unaffordable.
|
Everyone, individuals and
businesses alike, is facing
higher property taxes.
Florida’s economy and housing
market have been great even
though hurricanes ripped through the state just a few years ago. The building
boom after the hurricanes, lower interest rates and the influx of people
wanting to enjoy our great state have caused property values to rise. Property
values doubled and tripled during this time, but this incredible growth
was also accompanied by huge increases in property taxes and property
insurance premiums leading to the current crisis facing the state today.
Property tax in Florida is constitutionally a local tax; administered, levied,
and collected by local officials. In 2005, 67 counties, 67 school boards,
462 municipalities, 231 independent special districts and 5 water management
districts levied some type of property tax. That equates to 832 entities
collecting a total of $25.9 billion, which makes property tax the largest governmental
resource in Florida. School boards levied the most money in 2005
— approximately $10.4 billion.
Basically, there are three main areas of concern from the perspective of
taxpayers and business owners.
- Affordability — property taxes are no longer affordable for
homeowners and businesses. The rapid assessment increases are
outpacing income growth.
- The “Lock-In” Effect — long-time permanent, resident homeowners
are finding it difficult or cost prohibitive to move to another home
within Florida. The “Save Our Homes” constitutional amendment
caps the amount of increase of property tax on homestead property
to 3%. However, all the benefits from the “Save Our Homes”
amendment are lost when ownership of the home changes. The loss
of these benefits (or tax increase) can prevent residents from selling
their homes and relocating.
- Equity — Florida’s property tax system creates and sustains significant
inequities among taxpayers (business owners have seen their
property tax bills double and triple as a result of the unintended
consequences of the homestead exemption and the “Save Our
Homes” amendment).
Multiple bills have already been filed to address this issue. Some of the
ideas being discussed include: assessing non-homestead property based on“current use” only instead of “highest and best use”; capping growth rates on
all properties; increasing homestead exemptions; allowing homeowners to
take their “Save Our Homes” benefit with them when they relocate within
Florida; and replacing property taxes with another source of revenue. |
