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League of Cities opposes amendment

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By The Staff

The Florida League of Cities has issued the following information in opposition to the proposed property tax amendment.

Amendment #1: Why It's Wrong for Florida

BACKGROUND: The membership of the Florida League of Cities recently passed a resolution to OPPOSE the proposed property tax constitutional amendment on the Jan. 29 ballot.

What the Amendment Does

The proposed constitutional amendment does four things:

It grants an additional $25,000 homestead exemption for properties over $75,000 in value - (but this doesn't apply to the property taxes paid for schools).

It caps the growth in taxable value for non-homestead property at 10 percent per year. (This again does not affect the portion of taxes paid for schools.)

It grants a $25,000 tangible property exemption to non-homestead businesses and landlords, whether they live in Florida or not. (This does affect the taxes paid for schools).

Lastly, it allows homeowners to move up to $500,000 in tax benefits accrued from Save Our Homes to another homestead anywhere in Florida. (This does affect the taxes paid to schools.)

Reasons why the League of Cities Opposes the Proposed Amendment:

Portability exacerbates an unfair tax structure and punishes young families

This portability feature makes an already unfair tax system even worse. The amendment will further shift the property tax burden from homestead property to non-homestead and from longtime homeowners to first-time homebuyers - whether it's a family relocating from Ohio, or whether it's a young couple trying to buy their first home. Small business owners will also be forced to pick up more of the tab.

According to an analysis by Florida TaxWatch, the proposed amendment "gives relief to those who need it the least, while giving virtually nothing to those that have seen their taxes rise the most." Florida TaxWatch adds that the plan "will perpetuate and exacerbate the current system that shifts tax burden from homestead to non-homestead property. It will also continue to shift tax burden to new homeowners."

The Fiscal impact is unknown

It is impossible to guess who will take advantage of this new portability feature. For example, 10 people in Miami could sell million-dollar homes and each transfer a $500,000 tax exemption to a rural North Florida town, removing $5 million from the tax rolls.

The result would be that some Floridians may pay lower property taxes than their neighbors who have lived there 20 years. And because of the new rollback rate, this bad tax scheme could potentially shift the tax burden to everyone else.

The Legislature has pushed the tax burden for schools onto local homeowners

The Legislature has direct control over almost half of your property tax bill: the portion that goes to schools. The state decides how much property tax local school boards have to levy through what's known as the "required local effort" to fund education.

Despite state government's "paramount" constitutional duty to provide public education, the Legislature has pushed $4.1 billion in education costs onto local homeowners since 2000 - while its own contribution for schools has declined. Today, homeowners provide nearly half of all education funding through local property taxes.

Just this year, during the tax debate, the Legislature voted to raise the property taxes you pay for schools by 7 percent. Last year, the hike was 17 percent. If the state wants to reduce our property taxes, it could begin here.

The Legislature hits local taxpayers with unfunded mandates

Another driver of property tax increases is the Florida Legislature's practice of forcing cities to implement state programs without giving them any money to do it - a habit called "unfunded mandates." State and federal mandates on Florida local governments exceed $1 billion, forcing cities and counties to raise property taxes to pay for programs.

Renters fail to benefit from plan

The benefit does not provide any benefit to renters. In fact, if this amendment passes, the tax shift from homesteaded to non-homesteaded property will likely cause Florida rents to rise.

Florida Can Demand True Tax Reform From the Tax & Budget Reform Commission

The Tax and Budget Reform Commission is a 25-member citizens' group which has the power to place tax issues on November 2008 ballot. They have a chance to deliver true property tax reform to Floridians.

The TBRC could propose a tax system in which neighbors in similar houses don't pay wildly different tax rates, or where children don't have to subsidize their parents' tax bills. The TBRC could propose true tax reform where property taxes were based on actual property values, and where citizens could be sure that downsizing to a less-expensive house would result in a lower tax bill.