The pending property tax relief in Florida

Pending property tax relief in Florida -- a necessary evil?

The recent proposed property tax relief plan in Florida has fostered widespread fears that local authorities will be unable to provide the basic services Floridians have become accustomed to expecting, despite the desperate need for such reform (Wyman, Hafenbrack, & Kleindienst, 2007). In a press release, Florida's fire and police departments stated that they "acknowledge property taxes and insurance costs have reached crisis levels and some form of tax relief is necessary" even while warning that "emergency response authorities are concerned the proposed reduction in property taxes will drastically impact fire and emergency medical services" (Calzadilla-Fiallo, 2007). However, property values, and thus property taxes in Florida have long increased beyond the rate of inflation, since the Homestead Exemption was adopted in 1934 and first took effect in 1935, making it less significant over time (Wood, 2006).

The exemption allowed homeowners to deduct $5,000 from the value of their home when calculating their property taxes. In the 1930s $5,000 was a large deduction relative to the cost of a typical home. Only in the 1980s was the Homestead Exemption finally raised, as by then $5,000 was a relatively insignificant sum. The exemption was raised $25,000 and the current relief plan would double the homestead exemption to $50,000 (Wood, 2007). The proposed reform would also give first-time homeowners a 25% discount on their tax bills and allow homeowners to keep their Save Our Homes tax breaks when they move to another location in the state (Wyman, Hafenbrack & Kleindienst, 2007). "1995, the Save Our Homes assessment growth limitation was adopted... To limit the amount that taxes could be raised on a homesteaded property in a given year" (Wood, 2007).

It is estimated that 31 cities would lose about $94 million in revenue under two of the main components of the reform, the doubling of the $25,000 homestead exemption and the abolishment of taxes on low-income seniors. About $10 billion in property value simply vanish from one county's $167.8 billion tax roll, according to an analysis by Broward Property Appraiser Lori Parrish's office (Wyman, Hafenbrack & Kleindienst, 2007). But some cities like Oakland Park say they have planned ahead for the cuts (Wyman, Hafenbrack & Kleindienst, 2007). Regardless, the loss of revenue will include firing many employees, like the 1,000 Miami-Dade County employees who already learned the county was eliminating their jobs to provide property tax relief in 2007-2008. Countywide, if the new reforms are passed, 1,200 positions will be eliminated in Miami-Dade. Only 375 of them are administrative positions. Most of them involve transit, corrections, parks, aviation. However, the state assures residents that necessary members of the fire and police department will not be laid off in any counties, and some positions targeted for cutbacks will be transferred to other departments, and simply not renewed ("County Budget Provides Tax Relief, Loss of Jobs," Local10 News, 2007).