Tax cap bill fulfills promises to lower property taxes, worries local governments
By Sascha Cordner
Tallahassee, FL – Bills to lower tax rates for non-homestead and commercial property owners are working their way through the legislature. Many lawmakers say they support the idea of the bills, but as Sascha Cordner reports, others say parts of the proposals would hurt small counties.
Supporters of the property tax measure House Joint Resolution 3-81 say it will go a long way in bringing first-time home-buyers as well as businesses to the state of Florida.
"[It] will include first-time home buyer relief with a maximum exemption of 50-percent of the home, assessed value up to 200-thousand dollars. It holds schools harmless by exempting school portion of the tax bill from the assessment cap and first time home-buyer provisions provides for an effective date for the 2012 tax passed during the 2012 Presidential preference primary or in 2013 if it's passed during the 2012 general election. It eliminates the 10-year sunset provision as passed in 2008 under amendment 1."
Republican Representative Chris Dorworth of Heathrow is sponsoring a proposed constitutional amendment proposal that, if passed, will cap property tax assessments at 3-percent a year on non-homestead properties and commercial properties. A similar bill in the Senate caps the rate at a 5-percent. Currently, the tax assessment cap on these types of properties is at 10-percent. The bill received much support from the House Appropriations Committee, which said it liked the idea.
But, some lawmakers like Democratic Representative Leonard Bembry questioned the 3-percent cap citing how it will affect the struggling counties in his area for an example.
"And, if we have a 3-percent cap in small counties, it will absolutely put us in a position that we are unable to operate our local governments the bill itself in concept is great, but I'd really like to see this percentage get to 6 percent maybe."
Amber Hughes, a Florida League of Cities Lobbyist, says lawmakers need to realize the "unintended consequences" of this proposal and how it really puts the tax burden on the homesteaded properties, while trying to have the appearance of equality.
"So, if we do nothing else and this proposal goes through and we have to approve the exact same budget, no new services, nothing new, but exactly what we did the year before, it will result in a tax increase. It will result in a tax increase in these homesteaded properties because we have to shift the burden back to them. This, as I said is a constitutional amendment, and I think that we need to be very thoughtful and deliberative and go towards having more equity and fairness in our property tax system."
Both Hughes and Florida Association of Counties senior legislative advocate Davin Suggs say they want to lower the cap to 7-percent, instead of Dorworth's three. And, Suggs says though he appreciated the work Dorworth did on the bill, it still needs more work, especially regarding the cap because it will affect local areas.
"This non-homestead cap does not give us the ability to afford to do everything and that's we want to help, we want to decrease the inventory. I know that's killing the Realtors and I know the Realtor want to sell houses, I want them to sell houses. Period! My commissioners want them to sell houses, some of my commissioners are also members of the Realtors, and everybody wants to sell houses. I'm asking for you to put us in a posture to do everything you want in this bill."
And, when questioned about how he arrived at that percentage, Dorworth says he just wanted to treat everyone equally, but the number may change.
"There has been a fair amount of debate. Right now the Senate language is at 5-percent, it started at 3, it was just amended at the last committee. We're having ongoing discussions on that, but as of now, at 3-percent it's uniform across the board, but there is conversation taking place."
Democratic Representative Mia Jones of Jacksonville has a background in local government. She says the 3-percent cap will cause local governments to become the villain.
"I hope that we can get to a compromise higher than 3-percent. I think one size does not fit all. When you start to look at the decisions made in local governments, we make them the bad guys, and we make them the bad guys by the decisions that we make here and the citizens don't recognize that until after the decisions have been made, and they voted on it, and the ramifications happen on the back end."
Jones and other lawmakers say they supported the bill because the measure overall has a good concept, but they hope Dorworth takes the suggestions other people have laid out for him in regards to changing the cap. And, Dorworth says he is willing to hear these ideas, just not a cap at 7-percent.
"I've heard all the numbers, 3, 5, 7, we arrived at three because it matches up perfectly with Save our Homes is. There's probably some room to move to 5, one thing that I'm looking forward to see that number move up is too see some overall agreement that everyone's going to be onboard and I'm not comfortable with 7-percent, just so that everybody knows."
Dorworth does say all the property tax measures, including Senate Joint Resolution 6-58 and House Joint Resolution 3-81, do have decided interest in making sure the smaller counties do not have a heavy burden and he is working towards that goal.
The measure now heads to the House Economic Affairs Committee, its last stop before it heads to the House floor.
It will take a minimum vote of 3-fifths of the both the House and Senate to approve the amendment proposal for it to qualify for the November 2012 ballot, where voters will be able to weigh in on it.