Everyone in Florida knows that property tax reform is necessary. As a result, the state government has put a Constitutional amendment on the ballot January 29th. Unfortunately, Florida TaxWatch, a non-partisan organization, says the amendment won’t accomplish what is needed.
TALLAHASSEE — Amendment 1, the proposed constitutional amendment on Florida property taxes, does not target relief to those who need it most, perpetuates an inequitable system and exacerbates the tax shift to those taxpayers who have suffered the most. This is the conclusion of Florida TaxWatch, which today released its analysis of the amendment that will be considered by voters on January 29.
The report, “Amendment 1 on Property Taxes Is Not True Reform and Is Likely to Do More Harm than Good,” reveals a serious flaw in the amendment that would allow local governments to immediately recoup any lost revenue that taxpayers would gain under the amendment.
The report also states that the “portability” provision may well run afoul of the United States Constitution, according to the expert constitutional advice commissioned by the Legislature. Further, Florida TaxWatch warns that passage of the amendment could mean the end of true property tax reform.
“Florida can, and must, do better,” said Dominic M. Calabro, President & CEO of the nonprofit taxpayer research group Florida TaxWatch. “Sound advice for amending the constitution is ‘when in doubt, leave it out.’ For Amendment 1, we are convinced it is more than just doubt. There is plenty of evidence that this is not the right thing for Florida’s taxpayers and economy.”
The new property tax amendment falls far short of what is needed, according to the report. There are a number of reasons why:
• The plan gives most of the relief to those who need it the least (long-term Save Our Homes property), while giving very little to those that have seen their taxes rise the most (non-homestead property).
• It will perpetuate the current system and exacerbate the shift of tax burden from homestead to non-homestead property. It will also continue to shift tax burden to new homeowners.
• While some solution to portability is needed, there are serious constitutional concerns about providing it.
• The 10% cap for non-homestead property is so high as to be of little value to most properties.
• The $9.3 billion five-year taxpayer savings estimate is likely overstated. The proposal does not restrict local governments’ ability to increase millage rates to recoup revenue losses, thereby lessening the savings for some and shifting more tax burden to others.
• And perhaps most importantly, if the voters approve this new amendment, future attempts to reform non-homestead property taxes will be extremely difficult.
The report also includes assessments made by legal and economic experts who were hired by the Legislature to advise it on property tax issues. A legal expert warns of “100% certainty” of a constitutional challenge to the amendment on the grounds that portability violates the U.S. Commerce Clause.
“This proposed amendment will make a bad situation worse,” say noted economists who are quoted in the report. “It is a cure worse than the disease.”
“Undoubtedly, Florida’s property tax system is in desperate need of reform,” said Kurt Wenner, Florida TaxWatch Director of Tax Research. “Unfortunately, the Legislature’s need to pass something people will vote for, coupled with a sincere desire to help Floridians who cannot afford to move because of higher taxes, resulted in a proposal that is not only unsatisfactory but also likely to be detrimental.”
Click here for an electronic copy of the report.
Update – The Conductor at Babalublog also is opposed to the amendment.
Thanks for your report, I could see that I would benefit as I have been in my home for a long time. I also suspected that we will have to do more as the taxes which ARE dropped would have to be made up some other way. I think some of the salaries of the higher polititians, school officials, and government officials should not be so high. I will not vote again for Charlie Crist.
It doesn’t seem that shifting taxes to those who already can’t afford it will help the state of our economy.
The governor likes to conceal his true agendas with flashy promises. I too will not vote to reelect Charlie Crist.
Maybe I am reading it wrong but the way I readit is that although counties can raise millage for schools..and schools only..they cannot reappraise and raise the taxes on a new appraisal..I am gonna vote for it because it is better than nothing. Now if the Tallahassee experts can do something about the cost of insurance…like just get the hell out of the insurance business and let the free market work.
I sold my home and upgraded in late 2006. I absorbed a SUBSTANTIAL increase in my property taxes because I lost the “save our homes” value I had accumulated in the home I sold. My taxes went from ~$3200/year to ~$6800/year. I am very concerned that I will get hosed in 2 ways, (1) I did not get the benefit of portability and (2) I will be hit with the increase in local usage fees which are inevitable so the local govenment can make up the revenue shortfall. Do you feel I would have any legal recourse to attempt to have my late 2006 transaction grandfathered or otherwise?
As a disclaimer, I haven’t practiced law in years, so don’t think I know anything in particular. It seems to me from a political standpoint that you’ve pointed out one of the holes in Amendment 1. The disparity based simply on when you buy a home, rather than what has been traditionally the tax base – fair market value. It all points, IMHO, to the terrible idea that property taxation is to begin with.
I have seen this issue come and go and always it is the everyday people who always profit least from the decisions our law-makers make. It seems like it is “Let’s Make a Deal” when it comes to real reform for the majority of citizens. The cuts in our schools, our local social infrastructure—libraries, state parks, etc—are all institutes that our lawmakers with their high salaries and private schools for their children will never visit or have to use. I do not have anything against the success of anyone, but our society’s history shows a fiscal narrow mindedness when it comes to the lower income person. Amendment 1 like No Child Left Behind has done just that, left most everyone behind who need help; and more importantly the money stoppage at a certain level (higher income) has to stop. Losing $14 million dollars in Leon County when there was a need for an increase is a travesty, yet south Florida with its higher income and tourism seemed to be the winner in this legislation…I fear that North Florida is jut a stepchild of the state