Florida Legislature to Take on Property Taxes – List of Bills

Now that the special session on property insurance is complete, and the bill has been signed, the Legislature will move on to other subjects.

One of the biggest issues raised during the campaign last year is property taxes.

This is a complicated issue, which means this post could get lengthy.  However, I will endeavor to boil down the complicated facets for you, my loyal readers.

Let’s start by realizing that property taxes are the product of the tax rate (millage) and the property value. Now, I am over simplifying this, but the formula is basically:

Property Value   x   Tax Rate   =   Property Taxes

The property value is determined by the elected county Property Appraiser.  The Tax Rate is set, generally, by local governing boards (omitting, for this post, things like the Children’s Board, Port Authority, etc).

Now, in 1992, Floridians passed the Save Our Homes amendment.  This said that the assessed value of a homestead property (i.e. a property for which a homestead exemption had been filed) could not increase by more than the lesser of 3% or the Consumer Price Index.  In the 14 years since the amendment passed, the CPI was 3% or higher only 5 times — so homestead owners who kept their home, have received a tremendous amount of savings.

There are two problems.  First, the cap only applies if you keep your home.  When you buy a new home, the assessed value is re-determined.  The previous owners’ cap does not apply to the new owner.  This could lead to tremendous increases in the tax collected on that property, because of the previously undervalued assessment created by the amendment.  This oftean means that people can’t sell their homes and move to a new one, because they can’t afford the higher property taxes at their new house.

The second problem is, that since that time – especially over the past few years – the real estate market has seen often double digit increases in the values of property.  Non-homestead property (rental properties, commerical properties, and second homes) have not had the benefit of the cap.

So the Legislature has been asked to help.

There are at least 28 bills filed that deal with this subject, 12 in the House and 16 in the Senate, as of this posting.  Let’s look at these:

Portability

A significant proposal has been to allow homeowners to have some protection when they move from one homestead property to another.  To do this, the Florida Constitution must be amended.

  • HJR 23Rep. Carl Domino (R-Juno Beach) – This bill will allow the Legislature to provide a process in general law that allows for undervaluation of a new homestead property purchased within one year of selling a previous homestead property.
  • HJR 459Rep. Marcelo Llorente (R-Miami) – This complicated bill allows the cap to apply to a new homestead purchased within two years and in the same county. (Value of new home can’t be less than of the old home, new home can’t be more than 110% larger than the old home, and the homeowner can not have already benefitted from this portability previously – you can only move once. I said it was complicated.)
  • HJR 551Rep. Robert Schenck (R-Spring Hill) – Another complicated bill to allow the cap to apply to new homestead property purchased because the old home was taken through eminent domain processes. (New home must be equal or greater than old home, and difference between just value and assessed value of new home must be less than the difference between just value and assessed value of old home.) [Similar to SJR 688 - Sen. Steven Geller (D-Hallandale Beach).]

Non-Homestead PropertyAs noted, annual increases in the assessments of non-homestead properties are not subject to the Save Our Homes cap.

  • HJR 75Rep. Bob Allen (R-Merritt Island) – This bill would provide the homestead property caps to non-homestead properties and provide circumstances under which the assessments could be increased, based on market data.  [Comparable to SJR 378 by Sen. Mike Fasno (R-New Port Richey) and to SJR 888 - Sen. Bill Posey (R-Rockledge).]
  • SJR 652Sen. Carey Baker (R-Eustis) – This would provide a cap for non-homestead properties.
  • SB 890Sen. Bill Posey (R-Rockledge) – This bill implements the cap for non-homestead properties as contained in SJR 888, if the amendment passes.

Just ValuationCurrent law says that, in determining the proper value for a piece of property, the assessment must be based on the highest and best use of the property.

  • HB 163Rep. Tom Anderson (R-Holiday) – This bill would remove the “highest and best use” terminology from the determination of just value.  [Identical to SB 508 - Sen. Mike Fasno (R-New Port Richey).]
  • HB 261Rep. Carlos Lopez-Cantera (R-Miami) – In addition to removing “highest and best use” terminology from  the determination of just value, it requires property appraisers to use only income from income-producing property. [Identical to SB 722 - Sen. Jeff Atwater (R-Palm Beach).]
  • HB 473Rep. Robert Schenck (R-Spring Hill) – This bill would create another way to find the just value: the average of the purchase price of the property (less any amount paid for furnishings or other personal property), the assessed value of a comparable home that was capped for at least five years, and the assessed value of a comparable home that was capped for at least ten years. [Similar to SB 852 - Sen. Sen. Mike Fasno (R-New Port Richey).]

Limit Government Revenue

In a slightly backwards way, some legislators and Governor Crist are suggesting that local governments need to reduce the total amount of money they collect.  These bills would reduce individual property taxes by requiring the local governments to reduce their millage rate.

  • HB 193Rep. Stan Mayfield (R-Vero Beach) – This bill will limit increases in local government revenue to the percent increase in county population plus the increase in the Consumer Price Index.
  • HB 363Rep. Janet Long (D-St. Petersburg) – This bill will limit increases in local government revenue to twice the increase in the Consumer Price Index.
  • HB 503Rep. Joyce Cusack (D-Deland) – This bill would prohibit local governments from recieving local options sales taxes (Community Investment Tax, Penny for Pinellas, etc) if that government does not reduce its millage rate to an already defined “roll back rate.” [Identical to SB 220 - Sen. Evelyn Lynn (R-Ormond Beach).]

Other Measures

  • HB 501Rep. Joyce Cusack (D-Deland) – This bill says that additions that help strengthen a home’s resistance to hurricanes do not increase its assessed value.  [Similar to SB 158 - Sen. Steven Geller (D-Hallandale Beach)]
  • HJR 571Rep. Marcelo Llorente (R-Miami) – This proposes an amendment to the Constitution to double the homestead exemption from $25,000 to $50,000.  [Comparable to SJR 452 - Sen. Mandy Dawson (D-Ft. Lauderdale).]
  • SB 454Sen. Mandy Dawson (D-Ft. Lauderdale) – This bill implements the doubling of the homestead exemption, if the amendment is passed.
  • SJR 534Sen. Mike Bennett (R-Bradenton) – This complicated measure allows for portability of the homestead cap within the same county and within one year of selling a homestead property (provided the difference between the just value and assessed value of the new property is less than the difference for the old property, and the assessed value of the new home is the same or greater than the old home); doubles the homestead exemption from $25,000 to $50,000; says that the first $25,000 in value is taxable while the value from $25,001 to $75,000 is exempt; and provides for a 5% cap on inreases to the assessed value of non-homestead property.   These measures must be passed by the voters of a county or the county commission.
  • SJR 694Sen. Burt Saunders (R-Naples) – This provides a detailed mechanism to assess a newly puchased homestead property.
  • Sen. Rudy Garcia (R-Miami) filed three “shell bills” which may or may not be amended to include specific language: SB 786, SB 788, and SB 790.

These are only the first bills.  More will be filed by members, and you can expect House and Senate committees to work on this issue as well.  I will be following this issue, as will others in the blogosphere and mainstream media .

About Jim Johnson

Editor and publisher of The State of Sunshine.
This entry was posted in Florida Legislature, Property Taxes. Bookmark the permalink.

14 Responses to Florida Legislature to Take on Property Taxes – List of Bills

  1. Christina says:

    The simple fast is Save Our Homes isn’t good for the economy. It stops people from doing major additions or selling their current home and buying a new one. A much lower milage rate and simliar tax amounts from neighbor to neighbor is the only thing that makes sense.

  2. The operating budget bills are vague. Mayfield’s bill is better setting setting the limits to population size. The CPI is a good way to set taxes. It doesn’t count for building schools and road construction. Population is a better way to gauge budget costs. Sometimes we can get burned like overestimating student enrollment.

    Any thoughts on the Lightning $2 million-a-year rebate? The Lightning and the Magic are pushing for it. Not sure about other teams. I’m sure they won’t mind.

  3. Jim Johnson says:

    I support tax rebates to build sports facilities (and arts facilities for that matter). The Miami – er – Florida Marlins have a bill already to get $2 million more for a new stadium, and the Dolhpins want $2 million more to retrofit Dolphin Stadium to undo the renovations already paid by a rebate to accomodate the Marlins when they moved in.

    So, since Miami really wants it … and the Speaker is from Miami… the question is whether the Lightning and Magic will get left out.

    The interesting thing is that last year, the Senate put the Magic and Marlins into a bill… but the House stripped the Marlins out and forced the Senate to pass the Magic only bill or none at all… so they passed the Magic bill. I believe Jeb vetoed that bill last year.

  4. Jim, I don’t buy the tax rebates as stimulting the local economy. There is no prove that sports franchises provide an economic benefit from the community. In fact, I venture Tampa got badly screwed by Malcolm Glazier. The taxpayers incur the cost and Glazier reeps the benefits. Not exactly a partnership.

  5. The way I’m reading the these bills is they are limiting the way counties and municipality may appraise property. Short answer: no tax increases. Does property appraising become a state or county function?

  6. Jim Johnson says:

    Christina – The shortcomings of Save Our Homes, in light of the red hot property market over the last several years, has prompted the Legislature to explore the issue further. Remember, the amendment was passed because the proponents described seniors on a limited income being forced out of their homes because they could no longer afford the property taxes.

    However, there is no way that Floridians will ever repeal the amendment. I have doubts as to whether or not they will even allow the amendment to expand to include non-homestead properties. The best they might allow is some sort of portability.

    Michael – You are right, but property appraising is a state function. First, the office is in the Florida Constitution – a county can not decide to not have a property appraisers office. Second, you will notice that the legislation affecting appraising of property are amending existing law.

    If we assume that property taxes are too high, then we have to either reduce the millage rate or property value – or both . Hence legislators are considering a number of options.

  7. Jim the way I read the Florida Constitution was that property appraising was a county and municipality responsibility. The state has an office for bureaucratic purposes. But it’s the counties and municipalities that go out and appraise each property. One way to read this is the state is taking a bigger role in appraising property. It may not seem that way right now. The future may tell a different story.

    I wrote before that the reasons for the local property tax increases were the state placing the burden back on counties.

    I do feel Iorio got what she deserved. Property tax increases and the Riverwalk project aren’t a good sales pitch to voters. The property taxes need to go down. Partly because the housing market bubble has popped. Plus, people are getting pinched.

  8. Jim Johnson says:

    The only reference to “property appraiser” in the Florida Constitution is Article VIII, Section 1(d) – where is says that counties shall elect a property appraiser. How the office operates is set by general law — which means the state already dictates how it works.

    None of these bills would transfer the employees from local to state government, so that will not change.

    Municipalities do not appraise property for tax purposes. Only the county property appraiser does, unless the county has transferred those duties to another office (which is permissible under VIII-1-(d).).

    Oh, and since counties and cities are both created by the Legislature, counties and cities can be seen as merely local extensions of the state given autonomy by the processes spelled out by the state. I know this is mere semantics, but it’s important to recognize that what the state giveth to local governments, the state can taketh away.

  9. Jim, I have my wonk hat on. I understand this. The semantics are important. An older version of the Florida constitution used the wording used the wording county and municipality. There was no mention of the Consumer Price Index. The wording in that version also made it the resonsibility of counties and municipalitis to give tax ecempt status to historical landmarks. That’s not in the most recent online version of the Florida Constitution. See Article VII Section 4.

    State can give and take away. Agreed. I’m reading this from a literalist perspective of counties being maxed out of the appraising process. My read is state the stae getting more involved a piece at a time. Otherwise, I agree with you. We’re just looking at this differently. I’m taking the slippery slope attitude.

    I hope that cleared things up.

  10. Jim Johnson says:

    I see what you’re saying – but I don’t see it as a slope. Article VII, Section 4 says:
    “By general law regulations shall be prescribed which shall secure a just valuation of all property for ad valorem taxation…”

    To me, that says the Legislature has to pass laws on this matter. The “Just Valuation” section in the post applies directly here. The Legislature can also propose amendments to change these sections, hence the Portability section of the post. To me, these are areas that should be the purview of the Legislature.

    The only real slippery slope I see is the limitations placed on revenue for local government. I would support limitations that can be overridden by either a super-majority vote, or even a vote of the people. Other than that, the measures are a bit too heavy handed. If people elect “tax-and-spend” leaders, they get what they deserve, IMHO.

  11. I think we need to spend less time reading pdf files.

  12. Pingback: Blurbex » Blog Archive » Morning Roundup

  13. RG Tice says:

    Disparity between Just Market Value and
    Assessed Value (25-50% of JMV).
    Some properties TRIM notices reflect
    JMV and some properties reflect AV.
    Huge differences between Lee County,
    Charlotte County, Okaloosa County, Walton County, Lake County and Volusia County.

    One blogger moved to GA as an answer BUT
    Baldwin County Alabama TRIPLED taxes on
    this years notices.

    Solution is at the state level but SOH doesn’t
    seem to be a great option.

  14. thoms James says:

    Art. I Sect. 10, applicable to the States, and the Supreme Law of the Land, ‘The Constitution for the United States of America,” prohibits any State from passing an Ex-Post-Facto Law; therefore, any change, unless beneficial to the Homeowners who purchased with the CAP and SOH cannot be forced to accept any other so called Color of Law Enantment. This is set in stone and should the Florida Legilature, who have sworn or affirmed an Oath to uphold said Constitution, try to change the contract, accepted when people purchased their Real Estate, they will end up in Federal Court who will have no choice but to toss the changes. “Any Law violative of the Constituion, is Null and Void, has been since passed, and Shall be Disobeyed.” Marbury vs. Madison decided by John Marshall and carried through to the present time. This does not constitute legal advice….it is fact and law as established.

Comments are closed.