Florida voters in November will face a flurry of proposed amendments to reduce property tax levies for groups ranging from first-time homebuyers to disabled veterans, while preventing increases on those whose homes lose value.
Approved by the Legislature in 2011, several constitutional measures, led by Amendment 4, lump together a series of tax breaks that expand homestead exemptions for targeted groups. They also provide additional Save our Homes-like protections for commercial and non-residential property owners.
Economists say the four property tax amendments on the Nov. 6 ballot would reduce local taxes by nearly $2 billion over the next four years.
The main proposal is Amendment 4, which would prevent property assessments from going up when the value of the property goes down. Currently, property tax assessments are governed by the Save Our Homes law – which allows for assessments to go up only by as much as 3 percent a year, but has no mechanism for preventing an increase when the actual value declines. The law never contemplated the real estate price drop that Florida has seen over the last couple years.
Though the actual values of many Florida homes have dropped in the last few years, many homes’ assessed values are still well below the actual value of the property. That’s because for years the real values increased by much more than 3 percent a year while assessment increases were capped.
Amendment 4 would also reduce from 10 percent to 5 percent the cap on annual assessment increases on non-homesteaded properties, such as businesses or vacation homes.
First time homebuyers would get a temporary additional break by receiving an additional homestead exemption that would phase out over five years.
“Reducing the uncertainty of potentially large property tax increases will increase investment in both non-homestead residential and commercial property in Florida, and the econometric model bears that out,” said Jerry Parrish, chief economist for Florida TaxWatch, in a report favorable of Amendment 4 released in July.
Backers of Amendment 4 have amassed millions for the effort. The Florida Realtors have raised more than $2 million for their political action committee, Taxpayers First, which has paid for mailers and other advertising in support of Amendment 4.
A coalition of city and county groups, sheriffs and others is trying to muster forces to fight the proposal, arguing it will result in cuts to schools, fire protection, law enforcement and other local services funded largely through property taxes. They also say it would further skew the tax burden of owners of similar properties.
Amber Hughes, a Florida League of Cities advocate, said the organization opposes Amendment 4 and is trying to get the word out to members and their constituents that its passage will mean billions in lost revenue to already cash-strapped local governments.
The Legislative Office of Economic and Demographic Research estimates that city, county and special taxing districts would lose $1.7 billion over the next four years if the measure were approved.
“The biggest issue is that (Amendment 4) makes our property tax system much more complicated and treats similar properties differently,” Hughes said.
While Amendment 4 has drawn most of the attention, three other tax amendments will also face voters in November. Unlike Amendment 4, the other proposed changes have not prompted much criticism, largely because they will not significantly reduce local revenues.
– Amendment 2: The proposal would provide an additional $25,000 homestead exemption to a disabled veteran or a dependent.
-Amendment 9: The proposal would provide an additional $25,000 homestead exemption for the surviving spouse of a deceased military veteran or first responder.
– Amendment 11: The proposal would offer an additional $25,000 exemption for residents 65 and older whose income is less than $25,000 a year.
–News Service of Florida