Florida's OTHER election on Jan 29

Besides the presidential primary in Florida on the ballot January 29 (the Republican primary half-counts, the Democratic primary doesn't count at all) is a constitutional amendment proposal to change Florida property tax system. As a result, voter turnout is expected to be high for both parties, despite the primary penalties that have been imposed.

The amendment proposal was placed on the ballot by the state legislature and tries to deal with the severe inequities in the current system. The emphasis here is on the word "tries". Since the Republican dominated legislature was unable to come up with comprehensive reform, they have put forth a band aid approach. Gov. Charlie Crist likens it to "not being able to hit a home run every time, but this time, at least we've hit a single." The opposition has countered that this is one time when hitting a home run is what is called for.

Florida has no state income tax. There is a sales tax (between 6 and 8 percent depending upon local add ons), where the state receives the majority of it's revenue. Property taxes are used to fund schools and local government.

As property values have skyrocketed in Florida since 2000, so have property tax assessments and local revenues. The legislature, in a jealous pique, last year mandated cuts in local revenues by rolling back rates. (Notice they did nothing to roll back the sales tax rates - the source of THEIR revenue.) Proposition 1 attempts to add to these cuts by doubling the homestead exemption from $25,000 to $50,000 (but only on properties valued over $50,000 - to prevent the complete removal from the tax rolls of low value properties.)

But the big grumble in Florida with property taxes has been the unequal treatment of properties as a result of what's called "Save Our Homes", which was implemented by constiutional amendment in the early 1990's. With this, owners who claim a homestead exemption have been protected from increases in property values, capping the increase to no more than 3% in a single year. Resulting, especially when property values have been increasing at 10% or more in recent years, in significant tax savings for homesteaded property.

This means that second homes, vacation homes, rental property, business properties, have had to bear a disproportionate brunt of the increase in property taxes year after year. You can have 2 identical homes next to each other with wildly different tax bills. For example, the condo on the floor below me and mine paid $5800 in taxes for this year. The identical unit above me, because it has been homesteaded for a long period of time, only paid $2625.

This has presented another problem, however, as it discourages long term homeowners from moving or even downsizing because they then lose their tax advantage and have to pay taxes based upon the full value of the new property.

So in their wisdom, the state legistlature has decided to exacebate the problem even more by introducing the concept of "portability", allowing you to transfer up to $500,000 of your property value savings to a new home. As a result, non-homesteaded owners (including business and landlords) will not only continue to pay a disproportionate share of property taxes, their share will actually increase.

This amendment is being strongly supported (and financed) by the real estate industry, who seems it as a "fix" for the severe housing slump in Florida. (In Florida, businesses/corporations are allowed to contribution to candidates and contribute unlimited amounts for ballot issues.)

Florida is in a financial mess at the moment. The state is facing severe cuts because of sales tax revenues are not meeting projections because of what is truly a recession down here. Property sales are almost non-existant.

But in true Republican fashion, rather than try and come up with a bi-partisan, comprehensive long term solution, they seem to be throwing fuel on the fire, while cutting funding the the fire departments that will be needed to deal with the inferno. It's been estimated that the average savings from this initiative will be around $300 (sounds like the Bush tax rebate of a few years ago!). But the long term ramifications are far more severe. And even at $300 per household, local governments are bracing for an additional round of belt tightening, even more severe than what was required from last years mandated rate reductions.

In Florida we changed our initiative process 2 years ago, so that it now requires a 60% approval to amend the constitution. We will learn on the 29th if the citizens of Florida have more sense than to fall for this "one size fits all" approach from our Republican leaders.