Property Taxes and Property Rights
While Florida legislators are putting a "good spin" on the results of the recent Special Session on Property Tax Reform, the reality is Florida received "tax reform light." Despite all the tough talk about the urgent need for reform and big promises, these intentions were no match for the well-organized whining of municipal leaders.
While other organizations might be echoing the "some relief is better than no relief at all" spin, CPR will not.
From a property rights' perspective, the primary issues were, and remain, the cumulative weight of the burden of government upon the rights and freedoms of all Florida property owners and the lack of equity in the distribution of our tax burden.
According to the Florida Chamber of Commerce, from 2000-2006, the cumulative growth rate in the burden of property taxes levied equaled 80% for counties, 98% for cities and 110% for special districts.
While the Legislature's decision to maintain property tax rates at the 2006-2007 level and the mandate of modest county-by-county cuts of up to 9% will generate light tax abatement, the statutory proposal does relatively little to lift the heavy cumulative burden of taxation placed on the backs of both new and non-homesteaded property owners.
Using very simple math, if the maximum cuts are implemented, county land owners will continue to carry a 71% increase, municipal land owners a 89% increase, and special district land owners a 101% increase. Despite the welcomed promise of caps on future revenues, all new and non-homesteaded property owners will continue to carry the impact of previous increases well into the future.
Cutting 06-07 rates by 0-3-5-9% is akin to having 9 spikes plunged into your eye and then having a good Samaritan remove one spike. Yes, property owners are thankful for this relief, but deserve much more.
Local municipalities also retained the ability to override statutory roll-backs, with either a two-thirds majority vote for increases up to 10% or unanimous votes for increases over 10%.
Due to time and space constraints, CPR will not sound off in this edition on the Constitutional reform proposal simultaneously passed by the Legislature, as its impact will not be meaningful unless passed by Florida voters. The complexity of this compromise proposal may have severely compromised its likelihood of passage.
Much more likely to pass will be one of the citizen-initiated referendum expected to be filed and which will gain momentum when non-homesteaded property owners get their next tax bill.
Property related savings and investment spending are a driving force in our State economy. When you remove incentives to derive benefit from investment in real property, individual buyers will seek out other regulatory climates where the freedom to pursue the American dream is more highly valued.
During the past decade, Florida's economy has continued to rumble along in spite of the increased burdens of local taxation and local land use regulations. However, if significant tax relief is not eventually passed the knees of Florida's economic pack-horse will buckle. Not even a Thoroughbred stakes winner can hold up when asked to carry too much weight, for too long. And, when Florida's economy stumbles, municipal officials will be the first impacted by the ramifications of short-term thinking.
For a comprehensive side-by-side review of the property tax reforms passed, please review an excellent commentary produced by the Florida Chamber of Commerce, available at: http://www.flchamber.com/docs/Coalitions/PropertyTaxSide-by-Side6-14-07.pdf
