Study: Property-tax exemption is unfair

[Herman Munster]

http://www.news-press.com/apps/pbcs.dll/article?AID=/20070215/NEWS01/70215042/1075

The 223-page state study released today is the first broad-brush analysis of how the 1992 Save Our Homes amendment that capped tax growth for homesteaders has played out. Its release comes as the governor and lawmakers grapple with ways to make good on campaign pledges to lower property taxes for everyone. And it largely confirms what many property owners have been saying for years: Exemptions on resident homeowners have reduced the tax base, limited local governments’ ability to raise revenues, and shifted the burden of paying for roads, services and schools from Florida homeowners to businesses and seasonal residents. The shift has been sharpest in coastal areas, South and Central Florida. The shift has created widely different tax burdens between homesteaders and those who own similar properties but haven’t lived there as long.

The report also concludes making Save Our Homes portable would increase the unfairness in tax burden between homesteaders and everyone else. That’s because Save Our Homes savings get wiped out now when someone moves, and making the discount "portable" would encourage more people to move and keep more value off the rolls instead of recycling it. "There is evidence there is a lock-in effect. If you remove that lock-in effect, some people would move who otherwise wouldn’t," said Amy Baker, coordinator of the Legislature’s Office of Economic and Demographic Research, which produced the report. "As soon as you do that, you affect taxable value and you have even more tax shifting going on."

Additional highlights:

* The increasing shift in tax burdens to businesses may cause them to make less commercial investment in Florida and more in other states.

* Homesteaders who have held onto their Save Our Homes cap since it took effect in 1995 have a lower real tax bill today, because inflation has often been higher than the 3 percent increase in assessments the cap allows.

* Save Our Homes has actually benefited the richest parts of the state by allowing them to draw down more state funds for school districts, and forcing poorer areas to impose higher school taxes.

"It proves a number of things that we’ve believed to be true," Baker said. "Now we can show exactly where it happened and when it happened."