So Florida Lawmakers took a moment to announce they've come closer to finalizing the Property Tax Reforms that have been the subject of special legislative sessions that seem positively never-ending to residents in the state.
The local media has been buzzing with anticipation of the final announcement of where the taxes will roll back - but based on the latest numbers, I am personally quite underwhelmed.
There were issues that went untouched entirely and property owner classes who really are only getting token reductions while the "target property owner class" really didn't get that big a boost by the numbers.
Here's the breakdown:
- Taxes will be frozen at 2006 levels at the City and County levels... this coming from ideas that said there would be an actual rollback as far as back to 2001.
- Taxes will be reduced by 0-9%... those that get a 0% reduction are likely going to be upset... but 9% isn't a lot considering some assessed values have gone up considerably more than that in recent years. Counties and cities that have raised taxes the most in the past years will have the steepest reductions. Palm Beach County Florida is due 9% for sure. Some cities like Belle Glade Florida that have not raised taxes would not reduce taxes.
- Revenue growth for Cities and Counties would be capped in the future based on growth of personal income in the state... so local surges in population and job creation would be countered if the entire state doesn't grow in synch.
- Local governments could veto their caps, but only with a unanimous vote.
- School Taxes will be untouched in the first year... but that's just a warning to local governments to prepare themselves. With thousands of vacant teaching positions, cutting taxes won't help when trying to fill those spots!
Homestead...ugh, what an issue. My past posts detailed homesteading and the new percentage system. Here's how it will work...but only after a majority vote (possibly not a simple majority but a 60% majority will be needed) on January 29, 2008 in the Florida Presidential Primary Election:
- 75% off the first $200,000 in value... house assessed for $200,000 would pay taxes on $50,000 value.
- 15% off the next $300,000 in value... house assessed for $500,000 would pay taxes based on $305,000 value ... i.e. $50,000 for the first $200,000 and $255,000 on the next $300,000 in value
- No further exemption for homes valued above $500,000
- This plan definitely targets people who own or will own property in the low and moderate income ranges
- This plan is far superior to a flat $25,000 homestead which does little at the top or bottom of value
- This plan misses the mark in many counties where median property values are higher than $200,000
- This plan does not help a huge sector of middle income property owners at the $400-650K range which is a large section of future middle-income buyers. This price range is basically where the family homes come in for many of the "middle class" citizens live that Legislators wanted to help keep in the state.
- Portability... with only a tax freeze, many people will be frozen in their current homes and unable to upgrade or move because the issue of Portability has not been addressed. Only people that have been in their houses for longer than 4 years will really feel the significance of this plan
- Assessment Practices... the big issue in South Florida has been the interpretation of assessed values by County Appraisers. The Palm Beach County Florida Appraisers office has been embattled due to their view on Highest and Best Use judgements vs Property in current use. Having the Appraiser assess your property based on what the property could be some day in the future is unfair.
- Commercial Property Owners & Investors... a rollback to 2006 and a reduction of 9% for most of South Florida and other high growth Florida Counties will do little to help investors and businesses that own property. The incentive to move to Florida is diminished by the high property taxes.
- Renters... without reducing taxes of Investors, the high cost of taxes must be passed on via higher rents. This is a large population and a big issue for the working class.
- Snowbirds... a large part of the economy, albeit the seasonal economy, are the second homeowners from out of state. These property owners will get no further reductions. These are the people who eventually do move down full time but will not get the benefit of longer term ownership and portability if they upgrade or downgrade when they move down to Florida full time.
- Foreign Investors... this is the same scenario as snowbirds and commercial property owners. A lack of further reduction will lessen potential gains for these investors and send them to other destinations instead of Florida.
All in all... it is a start... but legislators need to reconsider both the freeze date and possibly roll back further (2004??)... and also at least address Portability and Assessment Practices to benefit a broader range of Property Owners.