Proposal to resciend property tax amendment faces uphill battle
An idea to rescind a proposed constitutional amendment on this November’s ballot appears to face an uphill climb in the Florida Legislature. James Call reports, a Senate committee Wednesday discussed a proposal to pull back an amendment that limit property tax increases to five-percent.
Last spring lawmakers voted to place a proposed constitutional amendment on the November ballot asking voters to limit annual assessments for certain non-homestead property to five-percent among other things. At the height of the housing bubble and right before the Great Recession began lawmakers began implementing reforms to reduce property owners’ tax bills. The property tax makes up more than 55 percent of local government’s revenue. As Scott Dudley with the Florida League of Cities explains, the recession and reforms were a double whammy for city and county governments.
“As you know property values continue to decline. It’s going to take cities to about 2016 and 2017 just to return to the 2005 levels. So ultimately cities are serving a 2012 population with 2012 needs with pre-2005 revenues. And there’s no immediate light at the end of the tunnel.”
And Florida counties tell a similar story. John Wayne Smith represents the Association of Counties.
“The last fiscal cycle we went through in the fall counties reduced again for the fifth year in a row $481 million from the bottom line of what they had in property taxes at the high water mark. That’s a 5. 2 percent reduction. That’s a five year total of $2.8 billion since we started the reforms and the relief efforts for accumulation of about 28-percent.”
Altamonte Springs Senator David Simmons thinks Florida has a bad case of tax-cut fever. He wants to pull back Amendment 4 on the November ballot and rework it. As written the amendment would extend the Saves our Home style cap to non-residential property. He explains that property tax caps have not worked as intended. He told the Finance and Tax Committee the various caps have created inequities. Where, adjacent homes identical in value may have tax bills differing in thousands of dollars because one homeowner has owned the property longer than the other. True value assessments are levied when a property is sold. Then subsequent assessments are capped.
“So we have a gross disparity, in fact I think it is clear that all the experts have said what we have created by such a system is a disincentive against selling property. It is causing people to want to hold property. It dis-incentivizes what we have all understood is necessary for a full and free economy and that is the free transferability of property.”
Simmons’ analysis is that Florida’s recipe of caps and assessments have distorted market forces, creating inequitable tax rates, forcing increases in other taxes and creating financial problems for local governments. A Collins Institute report found that local spending on public safety fell in 2009 for the first time in 30 years. But Tampa Senator Jim Norman, the Hillsborough County Commission chairman before being elected to the Florida Senate two years ago, told Simmons that he isn’t buying his analysis.
"We can’t have this dialogue here. But I lived it. I lived it for 18 years locally and I’ve seen the good, the bad and the ugly. I’ve lived through Save Our Homes; I’ve lived through every bit of this. And, some of the scenarios you are laying out just aren’t true.’
Norman favors the tax caps he says because he doesn’t want to tax people out of their homes. The representatives for cities, counties and realtors also declined to support Simmons' proposal in its present form but thanked him for tackling the issue. Simmons says he will get with the various stake holders and see if he can find a way to ease their concerns. His idea is to somehow incorporate a tax cap without creating inequities that is having two nearly identical piece of property being taxed at vastly different rates.
“There are obviously various different positions that people take on this but once they understand that equity is the fundamental requirement for any tax system. That I think we’re going to try to work to solve the problem. I hope so.”
Simmons says he will rework the proposal and then approach the Finance and Tax Committee for a second hearing.