This is a letter from a concerned taxpayer regarding Property Taxes
Recently Florida's fees for auto license plates and drivers licenses more than doubled and prospective school teachers now must pay multiplied hundreds of dollars rather the old rate of $25 or $50 to take qualifying exams. On other fronts, fees have multiplied. For example, permits for installing a septic system which were about $200 now are over $600. Additionally, taxes and fees on property exchanges such as doc stamps have soared. These are just a sample of the increases that this one citizen has experienced recently. There certainly must be many more. The legislature seems to be on a manic spree, raising every fee and charge possible past the breaking point. Meanwhile Floridians labor under an antiquated, inequitable and arbitrary property tax system.
Florida's Property Tax system is filled with unfair and inequitable exemptions, one of the foremost being the loophole that allows some of the wealthiest Floridians an unlimited total exemption on some of the most luxurious homes. I became aware of this loophole when tax issues were addressed in our county (Santa Rosa) and the county commissioners presided over record spending increases. I was curious as to how much the commissioners paid into the system that they controlled. A search of property taxation records revealed that at least one of our well-heeled county commissioners paid absolutely no property taxes on his luxurious home in an exclusive gated golf-course community. He enjoyed total exemption from taxes on his home. In this era of budget tightening and astronomical fee increases across the board, it is time the bring such unlimited tax loopholes for the wealthiest Floridians under scrutiny.
Our local county commissioner was exempted from property taxes due to a "service related" disability. My father served in World War II and had the same cardiopulmonary disease as this commissioner but received no service-related tax break on his modest home, certainly not the total, unlimited exemption enjoyed by our county commissioner. The reason seems to be that the commissioner suffered his cardiopulmonary disease in the latter phases of a 30 year military career. This county commissioner was not crippled by his malady, he played golf regularly, owned and operated a very active local business and was drawing a salary in the range of $50,000 to $65,000 for his part-time elected position. It seems logical that a great many people who stay in any career for 30 years suffer the same physical ailments- it is common to the aging process. In Florida, there is no requirement for this total exemption related to combat duty, nor are there limitations based on income as in other states. We Floridians should be duty-bound to take care of those who are really significantly disabled through a war-related incident in the defense of our country. However, it is an injustice to the taxpayer allowed by an unfair property tax system when millionaire businessmen live in posh homes and draw high salaries from taxpayer funded elected positions and yet contribute absolutely nothing in property taxes that other residents are required to pay. On top of that, the state and counties are drastically raising fees and charges on ordinary families to compensate for “lower tax revenues.”
Fortunately, the voters of Santa Rosa county removed that commissioner from office, but the tax system still needs correction. I am asking you to research this matter. If I am misinterpreting the current state of affairs, please let me know. If my observations are accurate, what can be done to rectify the issue?
Thank You,
Santa Rosa Taxpayer
August 21, 2008
Trim Notice Season, a time to remember!
Here we are, at another trim notice season, and what was announced by many tax watch groups has come to pass. Even with amendment one and the increase in homestead exemption, property taxes are higher than the year before. I am an example of what happened. My house lost 132,700 dollars in market value in 2008 from 2007 but my save your home cap went up another three percent, because… they could. If your property value is higher than your cap they can play catch-up until it reaches your property value for that year. It is a little quirk, that takes the wind out of the sail for any savings you might have gotten from amendment one. This is another slap in the face for voters who thought they were getting some relief and did not.
On my trim notice, if it stays the same, if no budget increase takes effect I will see a net increase in my taxes of another $783.52. Is this tax reform or are the politicians laughing at us once again. I hope we all remember the treatment we received when it comes times to vote. I am thoroughly discouraged. On the three properties that I currently own, I have calculated I will pay an additional $2,000.00 over last year. What a travesty!
post, David R Simpson
August 14, 2008
Judge drops Amendment five from ballot!
News just in from Tallahassee has seen circuit judge John C. Cooper rule that amendment five is ambiguous and misleading. He has struck down amendment five from being placed on the November ballot. Amendment five promised a tax swap by removing the required local effort portion of school taxes from the property tax bills to find other funding sources through the state legislature. The bill almost certainly would have required an extra penny of sales tax and additional mandates to make up the 8.6 billion dollar loss. Real estate members who were for the amendment say they will watch what happens when the amendment most certainly will be appealed and will head to the Florida Supreme court.
post David R. Simpson
August 13, 2007
The following is from the BUZZ Florida Politics News from the Times Staff
Judge seems skeptical of Amendment 5
UPDATE 2:53 p.m.: Cooper said he intends to issue an opinion later today or in the morning.
A Tallahassee circuit judge seems sympathetic to the argument that the Amendment 5 proposal is misleading, possibly signaling trouble for the "tax swap" to remain on the November ballot.
In the opening moments of a hearing now under way, Judge John C. Cooper has agreed that the ballot summary implies that the loss of property taxes for schools would be wholly replaced -- or "held harmless."
"You take a quarter from over here and you replace it from a quarter over here," Cooper said, illustrating the concept of an even revenue trade.But lawyers defending the measure countered that the summary refers to only the first year of implementation, 2010-2011, and thereafter the Legislature would have to come up with a plan. The proposal would eliminate at least $9-billion in school funding, to be replaced with other revenue sources including a higher sales tax.
The lawyers said it should be left to the public to decide. Replied Cooper: "In the court of public opinion, doesn't the public ultimately have to be told what it's being asked to decide?"
"This is a listing of what is in the amendment," Mark Herron, a lawyer for the defendants, said of the summary. "Does it specifically list every nuance and every detail? I would agree with everyone in the courtroom that it doesn't."
Cooper also honed in on a provision that would limit annual nonhomestead property assessments to 5 percent, down from the 10 percent adopted under Amendment 1 in January. Voters, he said, could think that had to do with the school property taxes at the heart of Amendment 5 and the ballot summary.
"I don't know if I'm the average voter," Cooper said, "but I had to read two or three hours to figure out what that meant."
Despite his probing questions, Cooper has also noted that backers of the plan could seek a court order forcing the Legislature to fully replace the money. That, of course, raises a host of other questions about separation of power.
Posted by Alex Leary at 2:01:10 PM on August 13, 2008 in Tax reform | Permalink
August 3, 2008
Amendment Five, which way to turn?
by David Simpson
Amendment five will be on the ballot for voters this fall, but is this a good or a bad thing? If it passes by the public, it will mean that the required local effort of school taxes that is seen on our property tax bill will soon disappear. This will give every property owner a huge decrease in the amount of tax owed. Hooray.. After all we certainly need it. Those 8.6 billion dollars gone will be left to Tallahassee to find a substitute amount of money to replace it with. Lets just see how difficult our legislators have it in finding the money to "Hold Education Harmless" as the amendment states. Unfortunately before we start, the 8.6 billion is really 11 billion by the time two more years go by with consideration taken for adjusted growth.
The first thing they can do, is generate an extra penny of sales tax, which will bring in an extra 3.9 billion dollars. This sounds good, it leaves them needing just another 7.10 billion. Oh, but we are in a serious downturn, the state has already cut 1.2 billion from the budget with the prospect of having to do it again. The economy has been such a wreck in Florida that it will probably take an additional two years before it has it's head out of water. This is not good. What else can we cut? We can cut some of those many sales tax exemptions that they have been giving out for years. After all there's 12.4 billion to play with. Out of that we do not want to tax medicine or food, residential rent and utilities. This leaves us only 4.1 billion to consider for taxation. Out of this block of money there really are only a few things that could be taxed without a free for all. According to Tax Watch, about less than a billion could be reasonably cut. That means our number is down to 6.1 . How about a two cent sales tax increase? I do not see that happpening in one swoop, so lets rule that out for now. Where are we going to get this extra money? We could ask the state for more money from the Florida Education Finance Program (FEFP), but they seem to be in bad shape already with declining revenue. What sounded great before is now going to be a real stretch to accomplish.
What needs to be done is to cut education. The political pundits hate to say that word, but Education has had a huge run-up since 2003. The state share or FEFP has stayed relatively stable during this same time and has even dropped a little bit from $6,768 to $6,491 in 2007. The required local effort zoomed however.
If the amendment passes we should trim the RLE from our taxes a little bit at a time, instead of one big tax break. I say maybe 25 percent a year for four years with the one cent sales tax taking effect that first year. It after all didn't occur in just one year. It took a number of years to ge to this point. During this same period in revenue neutral years the school system needs to live on a tighter budget. A system that can be mutually agreeable using some sort of percentage basis might work. We obviously need to get those dollars down.
If you can not make the numbers work on this tax swap, then we need to vote NO and look for something more actuarially sound. I'm sure a non politician or great CPA could make the numbers work before we put it on a ballot.
July 15. 2008
A good dose of realism
By David Simpson
I could probably never be described as an optimist but I never thought of myself as a pessimist either, but each new day brings more disappointment.
These are just conjectures from a citizen who is looking for any scrap of hope I can find that our economy has finally bottomed out of the mess that it’s in.
Today’s paper shows that the federal government’s bailout has continued and now includes the nation’s two biggest mortgage finance companies, Fannie Mae and Freddie Mac. These two companies needed to be propped up to maintain calm to the markets and keep liquidity going in the conventional mortgage markets. If they had been allowed to fail almost nobody would have been able to secure a conventional mortgage without good credit scores. If you remember a short time ago the federal government bailed out Bear Sterns to keep the skittish markets from collapsing further.
It would appear that now regional banks in Florida are experiencing double digit declines. Wachovia has lost 15 percent as well as National City. Banc Atlantic dropped 25 percent and Washington Mutual has lost 35 percent. The reason for this scare is the seizure by regulators of Indy Mac Bancorp Inc. It represents one of the largest savings and loans thrift to fail. This is a wakeup call to banks that have too much exposure to Mortgages. This provides further evidence that new mortgages will be hard to come by and Florida will continue to lag behind in any rebound of real estate.
I firmly believe we have hit a bottom in real estate prices, but the inability to secure a mortgage is going to haunt most people who would love to buy in our area. Just yesterday as I was cleaning up a rental home that I had put on the market, I was approached by three different people who needed a place to live. One has a home they have lived in for years but the mortgage is set to go up and their payment will increase to $1,800.00 which are beyond their means. Mine at $1200.00 per month looked attractive and was in an area close to their work. The second couple drove up and said they needed a place immediately. Tomorrow would be fine. They offered $1500.00 per month but would like to use the additional three hundred every month for the last month of the lease plus the deposit. They were renting when the landlord stopped paying the mortgage and they were foreclosed on and did not get any deposit money back or their last month on the lease. They were desperate and living with relatives. The third was a widowed mother that was with her son to try and find a place to live because hers was too expensive to live in any more because of property taxes and insurance. This all transpired in two hours as my wife and I did cleanup to sell a house that has little chance of selling in this market by a broker, but is capturing a lot of attention by renters, who have seen our small sign next to the large real estate one.
There is a desperation out there that can only be taken care of by a bold move to make it affordable to live in Florida. Yes we have the same problems as the nation regarding the credit crisis and sub prime mortgage mess but we have insurance problems and crazy property taxes to contend with also. Maybe we are all doomed to struggle in this recession or worse for several years, but if the government state and local can live within their means and continue to downsize their budgets then it is possible we can do a lot of good with the 1.35 percent property tax amendment, which will drop everybody’s bill by 20-25 percent. We all need it desperately in order to survive the hard times ahead.
A good friend from our tax group reminded me of a saying by Ronald Reagan.
No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth! Ronald Reagan
Government always finds a need for whatever money it gets. Ronald Reagan
I say we try and reverse this trend by being bold and living within our means during this period and reducing our taxes so as not to be over burdensome to our citizens
Question all State, County and Local TAX and SPEND Policies.
June 30, 2008
Commissioner says Property Tax increase is OK for Kids Programs
Pinellas County commissioner Ken Welch says that Kids programs through the Pinellas County Juvenile Welfare Board deserves a budget increase from property tax collections. He says last week that he believes the community looks at childrens services differently than they do government services. The Juvenile Welfare Board's budget was 62.6 million, With amendment one and a decrease in property values their budget will fall approximately 4.9 million this year. The commissioner would still like to see an increase.
While we congratulate Mr. Welch on helping the childrens programs, we believe most people people would surely insist on equality throughout the property tax system. The pain is the same no mater who's budget is in jeopardy. The court system, the city, county police, are all important, but no department should be exempt. It's bad medicine for sure but it requires sacrifice evenly across the board, even if you are a member of the board. post by David simpson
Amendment 5 blitz has started
June 26, 2008
A lot of rhetoric is coming from the Florida senate lately from Senator Mike Harodopolis office. It appears he has already started a campaign to stop amendment 5 from garnering support. He suggests a tax system out of control and does not favor the McKay tax swap plan. The tax swap plan has school taxes from the required local effort coming off of Homeowners property tax bills and substituted for an increase in a sales tax, or reduce exemptions that are now allowed under Florida law or more budget cuts.
The problem we see.. if an extra penny is voted on to supplement the loss, it would only make up about 4 billion out of an estimated 11 billion shortfall. Do we raise the sales tax two cents and still be short? Do we try to reduce exemptions that have been on the books for a long time?
Even if people vote for amendment 5 and it does pass, there appears to still be a formidable hurdle to jump. This hurdle could be just the beginning of a large protracted fight where no one becomes a winner. This swap is not the obvious solution for property taxes and could act as a delay for more meaningful reform down the road. post by David Simpson
Ammendment 1 Portability is a non factor
St. Petersburg Times reports today that portability has done little or nothing to boost the housing market. State governor Charlie Crist predicted great things to the real estate market once portability was instituted. According to the graph below portability savings have been flat.
County Number of Homeowners Average amount of new home value
Hillsborough
2,199
65,523
Pinellas
1,887
72,000
Pasco
1,366
59,297
Hernando
552
55,800
Full report by St. Petersburg Times
Portability fails to heat housing market By Alex Leary, Times Staff Writer In print: Monday, June 23, 2008
Gov. Charlie Crist stood before hundreds of Realtors in Orlando last summer and predicted fantastic things about the property tax cuts on the January ballot.
"Florida's going to have a sonic boom when this happens," he said, using rhetoric he would repeat again and again over the next several months. "You're going to be busier than you've been in your life. Get ready, get your rest, make sure your license is up to date."
Five months after the vote, Florida is still waiting for the sonic boom.
Sales data, interviews and anecdotal evidence all suggest Amendment 1 has fallen far short of the systemic cure Crist predicted.
For sure, the plan has modestly cut taxes for all homeowners by increasing the standard homestead exemption. But its more controversial provision — portability — has proven no match for Florida's housing bust and credit crunch.
Portability allowslongtime homeowners to transfer tax savings from Save Our Homes to a new house. It was aimed at homeowners who said they felt trapped in their homes because they would pay higher taxes when they moved. (Save Our Homes caps increases in assessment values for property taxes at 3 percent each year.)
To fully benefit, however, homeowners need to be able to sell the home they are leaving.
"Frankly I just don't see it setting fire to the market," said Tim Wilmath, director of valuation for the Hillsborough County Property Appraiser's Office.
Tens of thousands of Floridians, including more than 6,000 in the Tampa Bay area, will benefit from portability this year, because the ballot measure grandfathered in house swappers who bought and sold homes in 2007 and established a new homestead by Jan. 1 this year — before the policy was put to voters.
How much they saved varies, based on the difference between their old home's assessed value and its market value. But in Pinellas County, on average, home swappers were able to take about $72,000 off their new home's market value, for a new assessed value that saved them roughly $1,440 in annual taxes.
Now that homeowners know they can count on tax savings, coming months will provide a better picture of how portability affects the market. So far, just over 500 people have applied for portability for the coming yearin Hillsborough, Pinellas, Pasco and Hernando counties combined. That's not a lot, but with half a year left, many more are expected.
"I think we should all stay tuned," Crist said this month. "The signs that I see are encouraging."
But experts say portability's effect represents a blip in a market glutted with homes. "To take advantage of portability, homeowners have to jump into a saturated market," Wilmath said. "In that sense, they are adding to the problem."
In April 2005, 4,254 residential properties were on the market, according to the Greater Tampa Association of Realtors. This April, there were 21,033.
Realtors, who contributed $1-million to pass Amendment 1, say the market is improving and inventory is falling. "I think we've bottomed out and now we're in recovery mode," said Deborah Farmer, president of the Realtors association.
But Farmer's opinion isn't universal. Many suspect thousands more bank-owned homes could still pour into the market because of the mortgage crisis, further bloating inventory.
Statewide, single-family home sales were up 12.3 percent from February to March and 20 percent from March to April, according to the Realtor group.
Farmer thinks it is too early to judge the stimulus capability of Amendment 1, but acknowledged it is muted because some buyers cannot sell the homes they leave behind.
Case in point: John and Melanie Scharch, who moved to Hernando County last year from the Keys.
The couple carried $235,557 in accrued Save Our Homes benefit from their old home, reducing the assessed value of their new home to $93,336.
Without portability, the tax bill would be about $5,100 on the new home. With it, they will pay about $1,000 this year.
"It's great," said John Scharch, 57, who loves the convenience of being more centrally located. "But until I sell my other house, I'm not saving anything.
"I've had three people look at it and they really like it, but they say, 'I have to sell my house first before I can buy yours.' "
Scharch's new county is equally bleak. In May, Hernando saw 195 sales of all types of property except vacant land. That's down from 377 sales a year earlier, 610 in 2006 and 778 in 2005.
"I haven't seen any impact of portability," said Paulette Stearns, director of public service and exemptions for the Hernando County property appraiser.
Kyle Schaneville, who moved this year to St. Petersburg from Brandon, faces the same problem as Scharch. His home in Brandon has been on the market for more than a year. Now he's renting it. A 36-year-old physical therapist, he said that portability did not play a role in his decision to move and that he carried only minor savings to St. Petersburg.
Despite Crist's rhetoric and Realtors' optimism, some experts never thought portability would be much of a factor.
University of Florida economist David Denslow estimated it would increase sales by 10 percent, though in a normal market. That's what California saw under a similar law for homeowners 55 and older.
"We doubted quite seriously it was going to be a large stimulus," he said. Portability savings so far
Amendment 1 allows homeowners to transfer their tax savings under Save Our Homes to a new house. Here's a look at how many home-owners qualified through mid June and how much they were able to subtract from their new home's assessed value.
A good dose of realism