Ideas Launched to Stem Rising Property Taxes
Property taxes are based on a pretty simple formula - take the property's assessed value, multiple it by the government-set millage rate, and that's your tax bill.
But some say that formula is out of balance because of too many variables. Kurt Wenner, a senior research analyst with Florida Tax Watch, says all variables - like the homestead -shift the tax burden.
WENNER: You know the agricultural exemption - which is a worthwhile but sometimes abused exemption - also shifts taxes to everybody all tax exemptions end up costing other people. It's more so with property taxes, because of the way the millage rate is figured.
How those millage rates are set is under scrutiny by the governor's property tax reform committee.
TURNER: The local taxing authorities have not reduced their millage rate in keeping with the increases we've seen in market appreciation and growth. When you use any statsitcal measurement, that could have done more to balance this crisis we have right now.
Hillsborough County Property Appraiser Rob Turner serves on the governor's reform committee.
TURNER: As we've gone around the state, some of these taxing authorities - I know here in Hillsborough, our increase for the board of county commissioners was 13 percent this year, 20 percent last year. Down in Miami-Dade, theirs was a 22 percent increase. Orange County, their values went up 22 percent for tax purposes and they were proud they would not have to raise the millage rate.
Turner is proposing that the state require all taxing authorities to cap their budgets.
Hillsborough County Commissioner Mark Sharpe says he's open to that reform.
SHARPE: I think that's where we might have to go. I think all governments must be pressured to live within their means, just like families.
Secondly, Turner wants to phase out the 3 percent assessment cap for future homeowners.
TURNER: If you have it now, keep it for life. After that we would begin not offering that as you buy your home in Florida. The third step would be to offer portability.
He says right now, people with the assessment cap protection are locked into their house.
TURNER: They can't grow their house because they would start all over again on their tax basis. They can't downsize, because they'd lose the protection they have, so I'm suggesting allow portability for those people who have it now to move one time.
Other reform ideas - include doubling the homestead exemption from $25,000 to $50,000, but Turner says analysis shows that would create such a large deficit that local governments would be forced to increase the millage rate.
Don DeFosset - chairman of the governor's property tax reform committee - says the panel has examined all manner of reforms -and even entertained the idea of eliminating all property taxes in lieu of increasing the sales tax.
DeFOSSET: in that specific example, if we were to eliminate the $25.7 billion the state receives in property tax with a sales tax increase, our sales tax that currently is 6 percent across the state up to 13.4 percent.
But because the Save Our Homes assessment cap is in the Florida Constitution - any change related to it will have to be passed as a constitutional amendment.
Property Appraiser Turner says addressing the tax imbalance - created by Save Our Homes - is as important as insurance reform.
TURNER: So many people are hurting today. We cannot wait even another year. It adds another layer of burden we hear property owners taking out loans to pay taxes and insurance and small businesses considering moving to other states.
The reform committee meets next week in Tallahassee to discuss their solutions.
©2014 WUSF. All rights reserved.