Politicians don’t generally telegraph what they think about ballot issues for fear of alienating voters. Not in this case. Palm Coast Mayor Jon Netts this morning left no doubt about his position on Amendment 4, one of 11 proposed constitutional amendments before voters this November. Amendment 4 would create more tax breaks for property owners, including first-time home-steaders and commercial and rental properties, but it would further crimp local government tax revenue and more likely shift the tax burden to existing homeowners than lower it.
“Amendment 4 is very disturbing because,” Netts said, “at least in my mind, it takes an already screwy property taxing system and makes it screwier, if that’s possible.” He urged his fellow-council members to study the issue. The amendment is opposed by the Florida League of Cities, the advocacy organization for municipal governments.
The amendment is heavily supported by Florida Realtors, who see in it a potential boon for home ownership because it offers an additional homestead exemption for any home-buyer who hasn’t had a homesteaded property in Florida in the previous three years. That includes anyone moving to Florida. There is an existing $50,000 homestead exemption. The proposal would add an additional exemption equivalent to 50 percent of the property’s market value. That exemption would phase out in increments over five years.
The proposal would also lower the rate at which non-homesteaded properties’ assessed values may rise. Homesteaded values’ assessments may not rise faster than 3 percent each year. (Since 2007, values have been falling. They’re not likely to rise faster than 3 percent for several years yet.) But Commercial and non-homesteaded properties, like second homes, rental property, vacant and farmland, may see their assessments rise by 10 percent a year. The proposed amendment would cap that increase at 5 percent. Again, the proposal is largely moot, because such properties aren’t likely to see values rise that fast in the near future. But should they do, the cap would also cap tax revenue—or force governments to increase the tax rate to make up for the lost revenue.
That’s why even among Realtors, there are strong dissenting vies over the proposal.
Barbara Revels, who chairs the Flagler County Commission and owns Flagler Beach’s Coquina Real Estate and Construction, has usually been an enthusiastic supporter of measures seen as benefits to the construction and real estate business. Not this time.
She said she and her partner at Coquina—Matthew Wilson, also a Realtor—are “adamantly opposed to Amendment 4. It will only exacerbate the problems for local governments to continue to keep services going.” Acknowledging that it’s a Realtor-led proposal, Revels described it as “very short sighted. If the loss of tax dollars due to the give-aways in Amendment 4 happen we will have to nearly max out the millage in the county to make up for the loss. The Realtors acknowledge it will be difficult for local governments to make up for the losses, but they try to sell it as sweeping bad inventory into home ownership and that property values will rise and make up for the loss.”
Revels doubts that would happen fast enough to keep everyone else’s taxes from going up. Local Realtors, she said, see through the gambit. “The ones I have spoken to are opposed to it,” Revels said.
Jay Gardner, the Flagler County Property Appraiser, is neither opposed to it nor in favor of it: he doesn’t take positions for or against political issues. But he leaves no doubt as to the proposal’s effects, or the underlying dishonesty of its promises: advocates of the amendment, Gardner said, never speak of its cost-shifting, and its effects on existing home-owners who have homestead exemptions. That’s the majority of property tax payers. They’re the ones who’ll end up paying higher taxes.
“You’re a homesteaded homeowner, you’re not a senior, you’re not someone who’s going to get a benefit of a military exemption, so when we pass these, someone is going to have to pay for it,” Gardner said. The principle applies to every tax exemption or tax break that benefits a particular segment of property owners. “It’s not a tax limiting thing at all. I don’t know why anybody thinks it is. It’s a tax shift.”
But Gardner doesn’t have an estimate of how much the proposal could cost Flagler’s local governments, should it become law. There’s been estimates of between $1 billion and $1.6 billion in revenue drops for the state. But local figures would be purely speculative, Gardner said, because it’s impossible to predict how many people would be moving in, how many would be new home-steaders, what the value of the home they’re buying, and on which the tax break would be calculated, would be, and so on.
Florida Tax Watch, a conservative group that supports the amendment, estimates that it would create 19,400 jobs over 10 years and lead to an increase in home sales of between 320,000 and 384,000 over 10 years. But the analysis does not specify what population projections it used. Some of the most reliable projections—by the University of Florida’s Bureau of Economic and Business Research—have been revised downward since the bursting of the housing bubble.
Netts heard no disagreement from fellow council members when he voiced opposition to Amendment 4. Even Jason DeLorenzo, a council member and the government affairs director for the Flagler County Home Builders Association, was behind the mayor. That was the case even though the president of the state Home Builders Association has endorsed Amendment 4. “The additional homestead exemption contained within Amendment 4 will benefit prospective homebuyers, current homeowners and Florida’s small businesses by giving incentives to qualified homebuyers,.” Dave Carter, the FHBA president, said in his President’s Message to the association last week.
DeLorenzo says the local association is “not touching it. We haven’t discussed it at all.” He added: “From my understanding of it I think it’s kind of shortsighted to restrict or handcuff local government revenues when the local governments know better what they’re going to need for infrastructure and so on.”
Magnolia says
Mayor Netts, I am more concerned about what you are trying to do to us and for us. If Realtors and the council are opposed, it sounds like this is something we need to support.
Bill McGuire says
This amendment was not a discussion or workshop item at the city council. The Mayor made his opinion known during the final comment phase of the meeting. The city council was not expected to nor prepared to opine as to Amendment 4. The Mayor was expressing his personal opinion and not putting something on the table for council discussion.
MSFB says
Here’s a suggestion, why don’t all of the registered voters in Flagler County take a minute or two and read the amendment for a change and make up your own mind instead of listening to people who may or may not have a vested interest.
Reality Check says
It is good and bad, the good is the government cannot increase or inflate your property values, so if the real-estate market goes lower they have to reassess and lower your homes value. The problem is two fold, if the value goes down so does the tax revenue, then where does the money come from to pay for City services? They need to find a way to lure industry here; we need that to help offset the cost to homeowners on property taxes. The average homeowner uses about a $1.39 or so in city services for every dollar they pay in tax revenue, so you can see how upside down this is. The average business uses about 40 cents in city services for every tax dollar paid; we need industry to help offset the costs. If we do not find a way to add industry, the tax burden will fall on the homeowners
tulip says
I too am against amendment 4. My fear is that people will vote for it because all they are thinking about is paying a little less tax and not thinking about the far reaching, and more expensive consequences
. I also don’t think there should be a moratorium on impact fees. maybe a reduction. Again, people that will benefit from the moratorium aren’t thinking or caring about the consequences of that action either.
Ralph says
Big government mayor is no surprise. Take from those who produce and give it to those who don’t.
anon says
What would one expect from a county and city whose main source of revenue is residential real estate property taxes.
The homeowners can be hammered only so much.
Maybe the voters in Palm Coast will finally figure out that paying for two governments is a waste of money.
One government will do.
The homeowners in Palm Coast can’t continue to foot the majority of the bill for the county and all of it for the city without the rate of tax continuing to rise. It has already gone up each year for the past several years.
Smarten up and stop riding that home rule train.
You've been tricked says
I see it as encouraging more people to move to Florida because it is a tax haven. One of the few states that allows you to declare bankruptcy but not have to put up your home to pay off debts. Some smart cookies bought ocean front mansions before declaring bankruptcy, enabling to hold onto their ocean front property. We seem hell bent on getting a State income tax here.
Vincent Neri says
Mayor Netts is worried that Palm Coast will receive less tax revenue and the additional need for revenue has to come from somewhere. Housing does not generate enough taxes to pay for itself. Palm Coast seems to be stuck in the middle of those that want economic expansion and those that want a retirement community. We have a malaise and need direction as to where the town and county want to go. Just wanting economic expansion does not bring economic expansion. Keep in mind however that bringing real jobs to Flagler county will raise property values and therefore property taxes. Demand increases prices and for people on fixed incomes that is a real concern.
DWFerg says
A boost to the current anemic state of our economy and flegling real estate market has to be considered favorably. The message to local governments is to spend TAX money wisely—-Perhaps more taxable properties, fewer defaults, and foreclosures may offset the exemptions outlined in Amendment 4. I have yet to hear a persuasive argument not to be in favor and thereby vote Yes for this one
PJ says
I’ts pretty simple the reason why you and Revels are not happy with this amendment is that you can’t manage your municipalities. So you rather have the change “AT WILL” to raise “FEES”.
DO your jobs and “MANAGE” your municipality and “STOP” with the fees.
I say support the amendment so these weak city goverment types can’t do what they just feel like doing to us all.
They are proven bad stewards of our goverment.
Vote YES 0n 4.
DO YOUR JOB POLITICIAN, MAKE YOUR CITY MANAGER WORK FOR HIS MONEY………………..
tulip says
Plain and simply put, the more tax revenue cities and counties lose, the less services we will have because there is no money left to pay for the very basics. For the small amount of money a resident will save on taxes, down the road it will cost people more because a certain amount of money is needed to run cities and towns, even for just the basics. Same as it costs money to run a household.
The extra exemptions are not on the entire tax bill and are for specific groups of people. So most people will not notice any particular savings but will notice and increase in what they put out in fees, higher millage rates, etc.
People need to THINK before they vote and how it will affect them at a later date .
glad fly says
i think netts needs to go.