Tim Nickens

The strangulation of Florida

Florida is well on its way to strangling itself, and it might just finish the job next year.

If that sounds too pessimistic, look at what's headed toward the November 2010 ballot:

• The Legislature just put on the ballot a constitutional amendment that would lower the cap on the increase in annual assessments of nonhomestead property to 5 percent. That's not a big deal now, but it will be when property values start rising again. This same amendment also creates a new, temporary tax exemption for first-time home buyers — creating the illusion that they can afford more house than their income allows. Isn't having champagne tastes on a beer budget how we got into the current economic mess?

• Hometown Democracy announced last week the state has verified enough signatures to get its amendment on the ballot that would require local governments to seek voter approval for local land use changes. This is killing a fly with a sledgehammer, and it would stall development just as the economy is trying to revive.

• Sen. Mike Haridopolis, R-Indialantic, will again push lawmakers next year to put on the ballot a plan to cap state and local revenues to essentially population growth plus inflation. It would require a voter referendum to go above the cap. Haridopolis is in line to be the next Senate president, so don't discount his chances of getting this draconian measure on the ballot.

Take these three amendments and tie them to the existing tangle of development rules and tax policy. The knot around Florida would be tight enough to choke this state to death. There would be no wiggle room, no opportunities for investment in the future — and no easy way out.

Instead, we would be borrowing the worst practices from other states. Like California, Florida constantly would be faced with a blur of indecipherable referendums, and government would be slashing services. And Florida also would become like Colorado, which is the only state now that has a similar Taxpayer Bill of Rights (TABOR — better get used to acronym) in its state constitution. The revenue caps created so much pain there that Colorado voters put the amendment on a five-year hiatus in 2005.

Of course, Florida is hardly a model now for visionary thinking.

Gov. Charlie Crist and state lawmakers just eviscerated growth management laws. They raised some $2 billion in user fees and cigarette taxes but did not tackle true tax reform. They claimed to adequately fund public schools, but Pinellas and other school districts are still looking at raising property taxes to make up for shortfalls that the state should have covered.

Then there is the property tax system, which may be the biggest mess of all and the hardest to solve. The Save Our Homes amendment approved by voters in 1992 created a terribly unfair system that favors longtime homeowners over businesses, rental property owners and newer homeowners. All of the tinkering since has only made it more unfair and more complicated.

Pinellas Property Appraiser Pam Dubov offers this example to illustrate the insanity:

One half of a duplex is owned by a low-income homesteader over 65 years old. The other half is owned by a nonresident who does not claim the homestead.

In the old days before Save Our Homes, the tax calculations were simple. For the homesteader, the taxable value was the market value minus the $25,000 homestead exemption. The nonresident just could not claim the homestead.

Now the homestead half of the duplex also has its increase in assessed value capped at 3 percent or the inflation rate, whichever is lower, by Save Our Homes. It is eligible for an additional low-income senior exemption of $15,000 or $20,000 or $25,000 or $50,000, depending on its location. And it is eligible for all or part of the additional $25,000 homestead exemption created by Amendment 1 if that half of the duplex is valued at $50,000 or more.

The nonhomestead half of the duplex has any increase in assessed value capped at 10 percent.

We won't even get in to how the taxable values are different for school districts and for other governments. You get the idea.

"Nobody comes to Florida from a property tax system anything like ours, and they all can't wait to tell us how much better it was than ours is,'' Dubov told Pinellas County commissioners last week.

There is widespread agreement on the problem. So far, there is no agreement on a solution that would be attractive enough to persuade voters to replace Save Our Homes with a fairer, simpler system. "We can't find anything to marry it up with,'' Mark Wilson, president of the Florida of Chamber of Commerce, told the Times editorial board after the legislative session.

So the chamber is busy carving out more exceptions. It was among the supporters of the 2010 amendment that would lower the cap on increases in assessed value of nonhomestead property to 5 percent. Wilson promises that the chamber's long-term strategy is to keep pecking away over the next decade with more changes and more amendments.

"It's going ugly and not pretty and unfair,'' he said.

That is not the best prescription for Florida's future. But amendments creating government revenue caps and requiring referendums on county planning maps aren't either. It's shaping up to be one fine mess for voters next year.

The strangulation of Florida 06/13/09 [Last modified: Saturday, June 13, 2009 10:24pm]

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