Property Taxes Enter House Committee’s Crosshairs
Members of the Florida House Finance and Tax Committee are looking for ways to extend tax breaks for homeowners. But local governments are worried about how the changes could impact their bottom lines.
The chair of the House Finance and Tax Committee, Matt Gaetz (R-Fort Walton Beach) wants to lead what he calls a “an assault on property taxes.”
“The most provocative of those options was a proposal that would have eliminated property taxes in Florida or created a super exemption that would have eliminated property taxes for a vast majority – almost 100 percent of all Floridians,” Gaetz says.
But leadership in the Senate, specifically Senate President Andy Gardiner, dismissed the idea almost immediately.
“Back in the House there were one or two Republicans that voted against that proposal and I was one of them. So, I think you know where I’m coming from. But I think it’s a healthy debate. So, I think there’s an opportunity to have some flexibility there," Gardiner says.
Now Gaetz is moving on
“I think that we can suspend our discussion based on the Senate President’s view. I’m glad we had the discussion. I’m glad that is provoked thought and I hope that it continues into the future. But that leaves us with other concepts that members of the committee presented,” Gaetz says.
Like this one from Rep. Ray Rodrigues (R-Fort Meyers), who wants to change how property taxes are calculated under the state’s Save our Homes Amendment.
“It limits the increase in assessed value to the lower of three percent or the CPI, the rate of inflation, whichever one is lower. And administrative judge ruled after that amendment was adopted by voters that local governments could continue to collect either 3 percent or the CPI, even if property values were going down. They could be authorized to recapture the saving that tax payers had enjoyed,” Rodrigues says.
Rodrigues wants to repeal the recapture provision.
“If the taxpayer is watching their property values go down, government should not be increasing the amount of money they take from the taxpayer for that property,” Rodrigues says.
Save Our Homes puts a ceiling on how much a person’s assessed value can rise each year. Assessed value is the price a property is given for taxing purposes and differs from the selling price.
Another point to understand is that 3 percent cap doesn’t mean your property taxes can’t go up by more than 3-percent each year. That’s because municipalities and school districts can also adjust the tax rate. And that’s something Davin Suggs from the Florida Association of Counties points out.
“You are not cutting my taxes or raising my taxes and then cities, counties, schools have to make a decision on whether to assume the fiscal impact by keeping my same millage rates or I can mitigate the cost and raise my millage rates and get the fiscal impact to zero,” Suggs says.
Suggs says under Rodrigues’s plan, local governments would either face a revenue reduction or would need to raise the tax rate to keep their revenue the same. And he says if the recapture provision is repealed that could just end up shifting the tax burden from one neighborhood to another. But Rep. Gaetz says there’s a third option.
“Why is it a fait accompli that the burden will shift rather than that the size and scope of government will shrink?”
Others are urging lawmakers to put a hold on property tax changes until the Constitutional Revision Convention meets in 2017. They argue the convention will give leaders an opportunity to create a complete tax plan, rather than make piecemeal changes.