Reflections about Florida Property Taxes as of November 4th 2007

I just learned that eleven citizen’s initiatives regarding Property Taxes have been registered so far with Florida Division of Elections. They all need to get 611,000 signatures to be placed on the ballot, and would have to be approved by 60% of the voters.
They range from:

- requiring voters to approve any local government initiative to increase their tax revenue by more than 3 percent, to
- Limit property taxes to 1.25% of any property assessed value (after homestead exemption)
- Replace property taxes with new revenues to be determined by the Legislature and transfer funding counties, schools and cities funding to the state government.
- Rollback revenue collections to the 2004-2005 fiscal year, adjusting it to the change in population and consumer price index.
And so forth.

The “Ax-the-Tax organization, which sponsored some of these initiatives, has influenced our tax laws over the past 20 years by helping to defeat 14 tax increase initiatives in Florida and other states, one of t hem Broward County’s attempt to increase its sales tax.

However, gathering these signatures means big money and strong political leadership and that will be their main challenge.

What does this mean? Floridians are not happy with the recent legislature initiative.

The provisions to be placed on January 2008 ballot evidently fall short of what Floridians had been asking for. Everybody agrees that the present tax system is flawed. It will be difficult to really fix it without major changes in the whole economical structure of our local and state governments.

The bottom line is there has been a very large windfall in counties and cities revenues from rising property values and the resistance to give it up is the main reason why we did not get a tax reform that would satisfy Floridian homeowners, snowbirds, investors and commercial properties owners.

Some facts to analyze are:

In 2001, the total of property tax levied statewide was about 16.6 billion

In 2006 it increased to 30.4 billion. Almost 85% hike in 5 years. The large increases have been in larger cities and municipalities.

During the same period, the state budget grew to 71.5 from 47 billion. The bulk of this revenue is produced by Florida sales tax, and document stamps from real estate sales.

During this same period, Florida’s population has not doubled and inflation index has not been by any mean disproportionate. In fact, what is happening these days is a reduction of part-time residents, many of them just waiting to sell their homes to go elsewhere.

It is evident that our government has extended too much during the last 5 years. And they have found their way to spend all the extra revenue. One of the factors is the public-sector employees and their geometrically growing retirement pensions that are not ultimately sustainable.

The local government excesses, the ridiculous amount of cities with their mayors, commissioners, fire departments, police departments, cultural departments, celebrations, city halls, and what more, has naturally managed to spend the extra money and they now threaten us to cut down on fire and police departments if we make any intent to control this nonsense.

The new tax reform proposal extends the privileges of the long-time homestead homeowners by allowing them to “transport” when they move to a new home.
Almost every body else has got a very limited relief. The new home buyers, the landlords, the business owners have been almost completely ignored. While the “save our homes” provision should be maintained as an instrument to avoid abusive budget spending by our governments, any meaningful property tax reform must address the necessities of all property owners.


Henry B. Nathan is a Real Estate agent in South Florida.
Please visit my website; www.condo-southflorida.com
with information about all Florida Condos and Florida Homes,
Aventura Condos, Sunny Isles Condos, Miami Beach Condos,
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