New Development in Property Taxes - April 25, 2008

New development on the property tax front.
It's on. On November 2008, we will vote on a ballot proposal to cut property taxes by about 25 percent. 60% of voters should have to vote yes to pass the amendment.
It would apply not only to homeowners but also to businesses, second homes and commercial buildings. The lost revenue should have to be replaced by new taxes and existing taxes raises to be decided by our state legislators. We are talking about 9.5 billion dollars.
It would also establish a 5 percent cap on yearly assessment increase for non-homestead properties - businesses, investment, and second homes. In January 2008, voters have already approved a 10% percent cap.
The Taxation and Budget Reform Commission voted 18-7 to confirm the plan which was approved last month, mandating a cut of school property taxes in about $ 9.5 billion by the year 2010.
The main opposition to the plan has come from business lobbying groups, like the Florida Retail Federation, who threatened with a lawsuit to block it, and some legislators who argued it would lead to a huge tax increase. In effect, the amendments actually mandate a tax increase. The president of Associated Industries of Florida which represents most Florida large companies, affirmed that there was a "99 percent certain there will be a legal challenge" to try to block it from the ballot, and that it was "the biggest scam since the Florida lottery, being sold as a decrease of taxes when, who knows what it'll be?"
The tax swap of the education spending recourses that must be replaced by the new sales tax raises will go up to $ 11 billion, since it includes a provision to increase by 7.5 percent the K-12 spending for the next two years. Other critics of the plan affirm that this is another case of irresponsible improvisation or "creativeness" that, under the cover of helping property owners, will ultimately overburden those who can't even afford to buy a home.
Under the proposed amendment, Florida legislators will have to replace the schools revenue with some combination of raising the sales tax by one percent, doing away with sales-tax exemptions given to many industries, cutting spending, or levying new taxes.
Add to this proposal, another one that the legislature is considering, about capping property taxes to 1.35% of assessed value, supported by Marco Rubio, the Republican House Speaker.