In the past forty years, the state of Florida has gone from being a southern backwater to the fourth largest state in the Union. A combination of no state income tax, a low sales tax, relatively low real estate prices and a mild climate attracted many new residents tired of the moribund economies, higher costs of living and colder climes of the northeast and the rust belt. The ocean views from 1200 miles of coastline on the Atlantic ocean and the Gulf of Mexico lured many to build their Robin Leach inspired mini-mansions and Macmansions often alongside or near the more modest cinder-block ranch-style or mobile homes of the early post World War Two, pre-Disney World years.
As Florida enjoyed its third or fourth real estate boom of the 20th century, the growing population required more government services which required more revenue. With no state income tax to share, local governments began to raise millage rates and valuations. As the rising tide of the real estate boom lifted the value of all homes, humble and ostentatious alike, tax bills began to reflect the new market values.
The Good Intention
As the population and wealth flowed into the state, real estate prices began to rise and with them, higher ad valorem tax burdens which threatened to drive many voting citizens from their homes. In 1995, the Florida Constitution was amended with the "Save Our Homes" amendment prohibiting any government from raising property taxes by more than 3% a year. To offer more tax relief voters approved a constitutional amendment granting a second $25,000 homestead exemption.
So much for the good intentions.
The Unintended Consequences
Florida now finds itself in the beginnings of another tax revolt as the owners of new or resale homes are receiving tax bills based on valuations at the market value while their neighbors who are protected under the SOH amendments pay 30%-50% less. The unforeseen consequence was that government, unable to curb its appetite fo revenue would demand that new property owners make up for the losses and limitations of the SOH amendment. In addition, the second $25 k exemption will result in significant revenue losses for many of the smaller, less affluent counties in the state.
Task Forces and Interest Groups throughout the State have been looking at various ways to rectify the situation and this past week, Republicans in the Florida Legislature went so far as to float the idea of no property taxes on homesteads at all. Instead, the state sales tax would be raised to 8.5% which it is said will be the highest in the nation. Coupled with local option sales taxes, the tax bite on retail sales could be near 10% in some counties and cities. Aside from the usual liberal objections about progressive taxes and tax cuts in general, the sticking point in the proposal is that businesses and non-residents would continue to pay the property taxes. This may not be constitutional. Constitutional or not, it certainly doesn't seem fair or sustainable.
Once again, a politically expedient patch could have unintended consequences as business owners and non-homesteaded properties are targeted to make up for the lost revenue.
As Florida enjoyed its third or fourth real estate boom of the 20th century, the growing population required more government services which required more revenue. With no state income tax to share, local governments began to raise millage rates and valuations. As the rising tide of the real estate boom lifted the value of all homes, humble and ostentatious alike, tax bills began to reflect the new market values.
The Good Intention
As the population and wealth flowed into the state, real estate prices began to rise and with them, higher ad valorem tax burdens which threatened to drive many voting citizens from their homes. In 1995, the Florida Constitution was amended with the "Save Our Homes" amendment prohibiting any government from raising property taxes by more than 3% a year. To offer more tax relief voters approved a constitutional amendment granting a second $25,000 homestead exemption.
So much for the good intentions.
The Unintended Consequences
Florida now finds itself in the beginnings of another tax revolt as the owners of new or resale homes are receiving tax bills based on valuations at the market value while their neighbors who are protected under the SOH amendments pay 30%-50% less. The unforeseen consequence was that government, unable to curb its appetite fo revenue would demand that new property owners make up for the losses and limitations of the SOH amendment. In addition, the second $25 k exemption will result in significant revenue losses for many of the smaller, less affluent counties in the state.
Task Forces and Interest Groups throughout the State have been looking at various ways to rectify the situation and this past week, Republicans in the Florida Legislature went so far as to float the idea of no property taxes on homesteads at all. Instead, the state sales tax would be raised to 8.5% which it is said will be the highest in the nation. Coupled with local option sales taxes, the tax bite on retail sales could be near 10% in some counties and cities. Aside from the usual liberal objections about progressive taxes and tax cuts in general, the sticking point in the proposal is that businesses and non-residents would continue to pay the property taxes. This may not be constitutional. Constitutional or not, it certainly doesn't seem fair or sustainable.
Once again, a politically expedient patch could have unintended consequences as business owners and non-homesteaded properties are targeted to make up for the lost revenue.
1 comment:
Good Intentions paving the way to ....
Oh well, another Tax Revolt might be good!
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