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Pain in the Assets? Realtors, Local Governments Debate Florida Property Tax Amendment

September 26, 2012 - 6:00pm

Of all the campaigns surrounding the Sunshine States 2012 ballot initiatives, the one promoting Amendment 4 is easily the most colorful.

"We're here to talk about Sudden Posterior Reduction Syndrome, more commonly known as 'Getting Your Assets Taxed Off, announces a faux talk-show host in one advertisement. The 30-second clip is an interview with a woman whose husband has had his assets taxed off. The segment concludes with her daughters plaintive sulk: I just want my daddy to get his asset back!

The video is a promotion for the Florida Property Tax Amendment -- Amendment 4, as it will appear to voters on the November ballot. The measure is one of 11 initiatives placed on that ballot by the states Republican-heavy Legislature.

But for all the proctological levity of the campaigns unconventional website,, supporters are dead serious in their conviction that Amendment 4 would provide much-needed fiscal relief to Florida taxpayers.

Because we knew this year would be the most negative, most expensive campaign season in American history, we wanted to start as early as possible with a creative theme that would rise above the noise without having to resort to typical gutter politics, pro-amendment campaign manager Ben Fairbrother tells Sunshine State News. Above all, we believe in a campaign that stands on the benefits that Amendment 4 will bring to all Florida taxpayers, rather than dishonest, negative claims from politicians.

If the amendment passes by the required 60 percent margin, it will change state law in at least three important respects.

First, it would authorize the Florida Legislature to give homeowners an additional tax exemption on their homestead --i.e., the property that is their primary place of residence. Right now, under the state Constitution, homeowners are entitled to a special tax exemption: $50,000 is deducted from the assessed value of their home, and they are taxed according to that lower value. This exemption is portable: When a resident moves from one homestead to another he can transfer some or all of his tax savings. If Amendment 4 passes, the Legislature will be empowered by the Constitution to implement an additional tax exemption for new Florida homebuyers: On top of the existing exemptions, they would receive another equal to 50 percent of the homestead propertys [market] value but not greater than [the] amount equal to the median [market] value of all homestead property within the county where the property at issue is located.

Second, Amendment 4 would decrease the existing constitutional cap on annual tax increases from 10 percent to 5 percent for all nonhomestead property (e.g., businesses and rental properties).

Third, the amendment would allow the Legislature to pass a law which would ensure that property taxes on homestead and certain nonhomestead properties do not increase if the market value of those properties decreased the previous year.

Supporters say the amendment is a step in the direction of greater tax equity.

If you talk to a Realtor who is on the front lines selling property every day, or to a small-business owner or to a young couple who wants to buy their first home, what you find is our current tax system treats homestead owners in one very special way; everyone else is left to their own devices, says John Sebree, president of Florida Realtors, in an interview with Sunshine State News. And because of that, the property tax burden has shifted dramatically on to the nonhomestead property owner or even the non-owner like the renter who lives in nonhomestead property. So our mission over the last several years has been to bring fairness to our property tax system.

But critics of the amendment, chief among them the Florida Association of Counties (FAC) and the Florida League of Cities (FLC), say it just compounds inequalities in the states tax code.

We think Amendment 4 takes a very complex property tax system and makes it even worse, Amber Hughes, legislative director for the FLC, tells Sunshine State News. It could make identical property owners pay drastically different property taxes. For example, if you have a bakery thats been around for 30 years and a new bakery opens up across the street, the new one will automatically pay higher property taxes.

Hughes told the News the amendment might have a chilling effect on the expansion of small businesses.

You remember the days before the 2008 Save Our Homes Amendment was passed, when homeowners could not afford to move to a new house because their new taxes were going to be so high? Its the same tax policy thats now going to apply to businesses, she says, referring to the time before the state Constitution provided for the portability of the homestead exemptions. Portability is not in Amendment 4. If you have a business which wants to expand and hire 30 new employees and move to a larger facility, youre going to have the same kind of chilling effect we once saw with home ownership.

While opponents of Amendment 4 have tended to emphasize the potential loss of revenue by county and city governments as a result of the proposed new tax breaks, Hughes insists that concern is secondary.

Loss of revenue is a factor in our opposition, but definitely not the factor, she says. We obviously are worried that cities and counties are going to have to face either a reduction of services or an increase in other taxes. And we dont want either of those to occur.

Sebree says such concerns are short-sighted.

Unfortunately, local governments often look at everything in a vacuum, he says. They look at the benefit that someone is going to receive, and they say, Well, thats money were not going to have at the local level. And thats not true. If you give a benefit that inspires people to engage in the housing market and we start to see property change hands, were going to be in a position that we were in five years ago, where theres billions of dollars of extra revenue on the table to fund lots of new programs because of document stamp revenues, sales tax revenues, and increasing economic activity.

Hughes says what her organization wishes to see is more comprehensive reform measures in the direction of simplifying the state tax system.

Florida has probably the most difficult tax system in the country; it is riddled with different Band-Aids that pick winners and losers, she says. We at the League of Cities believe taxes should be fairer. Look at the ballot for November: you have five different amendments dealing with property taxes. When you go and add Band-Aid after Band-Aid after Band-Aid it just becomes very complex and its hard to get to a good place.

Reach Eric Giunta at or at 954-235-9116.

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