Friday, May 29, 2009

Florida Amendment One - Property Tax Reductions for the Less Affluent Have Been More Than Offset By Increases in Fees for Services

Today I received a bill from the city of Jacksonville for $111, comprised of 2009 fees of $51 for solid waste and $60 for stormwater. In 2008, the bill was just the $60 stormwater fee. Prior to that, these fees did not exist. They are a direct response to the January 29, 2008 passage of Amendment One to the Florida Constitution. According to the Florida governor´s web site:
Specifically, the constitutional amendment:
1. Doubles the homestead exemption for almost all homeowners, providing an average savings of about $240 annually. The new exemption applies fully to homesteads valued over $75,000, and partially for homesteads valued between $50,000 and $75,000. This new exemption does not apply to school taxes.
2. Allows portability: The Governor has heard from many Floridians that they feel trapped in their homes. Portability allows homeowners to transfer their Save Our Homes tax benefits from their current home to a newly purchased home within any Florida county. Portability applies to homes purchased in 2007 and later, and the benefit is capped at $500,000.
3. Provides an assessment cap of 10 percent for all properties not previously capped: While homestead properties are already capped at three percent, now all other properties, including rental properties, second homes, and business properties, will be protected from huge tax increases. This new exemption does not apply to school taxes.
4. Creates a new $25,000 exemption for business property, including office furniture, computers, machinery and equipment.

The amendment was marketed to the public as a guarantee of lower property taxes. Yet, the advocates failed to sufficiently explain that because the amendment reduces government revenues from property taxes (by allowing landowners to exclude more of their property from taxation), it has necessitated increases in other taxes and fees to allow local governments to provide the services (such as police and fire protection, schools, and garbage collection) that citizens expect. If one considers all sources of revenue for local governments, the effect of the passage of amendment one has been to shift the tax burden away from the rich (because they can exclude up to $500,000 of property value from taxation with the portability provision) to the less affluent.


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