March 29, 2024

Taxes

Fixes?

Mike Vogel | 12/1/2006

? Appraisals -- Rewrite the state's appraisal law so that appraisers must use current income to value commercial property. Landlords and business people complain that appraisers hike their property values based on inflated prices paid by developers for nearby land (comparable sales) or on "highest and best" use based on zoning that doesn't apply to their coin laundries, small motels or existing uses.

? Smooth the Spikes -- Base a property's taxable value on a five-year moving average assessment to smooth out jumps caused by real estate booms.

? Property Tax Caps -- Akin to Save Our Homes, but for all property. It would ameliorate the differences between properties protected by Save Our Homes and those that are not, shifting some of the tax burden back to owners of primary homes.

? Homestead Exemption -- Doubling the exemption is an option, but it would do nothing for renters, business owners and snowbirds. It has been suggested that the exemption be adjusted by the cost of living in each county. Florida TaxWatch says that if the exemption, last increased in 1982, had been adjusted for inflation since then, it would now be $50,596. The group favors periodic inflation- based adjustments in the exemption.

? Portability -- Allow homeowners to take their Save Our Homes tax breaks with them when they move. Originally proposed by Rep. Carl Domino, R-Jupiter, portability now comes in many varieties: Some propose allowing the tax break to be moved anywhere in the state, others just within a county. Views differ on now much of the break can be transferred. After seeing Domino's proposal go down in defeat in three legislative sessions, Ken Wilkinson, the Lee County property appraiser who created Save Our Homes, advocates a constitutional amendment on portability. Like doubling the homestead, it wouldn't do anything for firsttime home buyers, landlords, renters, snowbirds and business people who are now the most vocal about rising taxes. Allowing homeowners to take their tax breaks with them could open up legal claims of unequal taxation.

? Spending Caps -- Again, there can be many flavors. Cap county, city and special district spending but not schools? Cap by constitutional amendment (less flexible) or by statute (more flexible)? Cap operating budgets or all spending, including capital projects? Allow growth at a set rate, or a set rate plus inflation, or at population growth plus inflation, or some other yardstick? Allow overrides and by whom, supermajority votes of city councils or county commissioners?

? Rollback -- Local governments at present do a duplicitous dance with voters. The governments keep their tax rates the same, or even cut them slightly, but reap windfalls thanks to growing tax bases while arguing that they've not raised taxes. Florida Tax- Watch advocates a change in the law to force local governments to roll back their tax rates each year to a revenue-neutral level plus some tightly defined increase to handle new needs. To extract more money, councils and commissioners then would have to vote for a tax rate increase.

Next Stop?

? California's Proposition 13, passed in 1978, was the first of the property tax increase controls. Florida (Save Our Homes) and a number of other states have followed suit. Unlike Florida, where Save Our Homes targeted only a particular property class, Proposition 13 limited taxes on all property. After 10 years, property tax revenue on a real per capita basis was 49% of the 1978 figure, and local spending fell 10%, income taxes rose 6%, sales taxes rose 10% and user charges increased 29%, according to research by the Brookings Institution and California Senate. Some have blamed Proposition 13 for what they see as inadequate funding of government services.

? Praised for limiting government growth and panned as Draconian, the Colorado Taxpayer's Bill of Rights affects all government tax revenue -- not just property taxes -- and limits the growth of state spending to inflation plus population growth. And it limits local government and school spending growth by other formulas. Surplus revenue is refunded to taxpayers. Some local governments subsequently persuaded voters to lift the TABOR restrictions on them, and voters in 2000 approved extra spending on education and in 2005 relaxed the refund provision for five years to fund education, public safety pensions, healthcare and major transportation projects.

Tags: Politics & Law, Around Florida, Government/Politics & Law

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