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Amendment One Is A Step Backward

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The Tampa Tribune

Published: January 27, 2008

There is no doubt that Florida's property tax system needs to be reformed. This current inequitable system, coupled with rapidly increasing local government spending, has produced tremendous tax increases for many taxpayers. Unfortunately, these are not the taxpayers that Amendment One would help. The Legislature's need to pass something "people will vote for," coupled with a sincere desire to help Floridians who cannot afford to move because of higher taxes, resulted in a proposal that is not only unsatisfactory but also likely to be detrimental. Not to mention that one of the provisions may be unconstitutional.

Amendment One is bad policy for a number of reasons.

Amendment One does not provide the kind of tax relief that Florida needs. It gives most of the relief to those who need it the least (long-term Save Our Homes property), while giving very little to those that have seen their taxes rise the most (non-homestead property). Homeowners who have been in their homes since Save Our Homes was enacted have lower tax bills today than they did in 1994, in inflation-adjusted dollars. Everyone else has paid for the doubling of total Florida property taxes in the last six years. It is new homebuyers and non-homesteaders - landlords and renters, businesses, second and vacation homeowners, snowbirds and even homesteaders who also own non-homestead property - who have shouldered the burden of increasing property taxes. However, the amendment bestows 80 percent of its savings to homestead properties, leaving far too little the non-homestead property owners currently suffering the most.

Amendment One is not just a tax cut; it is a tax shift. It will perpetuate the current system and exacerbate the shift of tax burden from homestead to non-homestead property. It will also continue to shift tax burden to new homeowners.

Simply put, the 10 percent cap for non-homestead property is so high as to be of little value to most properties. The average annual growth in the total value of non-homestead properties is less than 5 percent. And since school taxes are not covered under the cap, it only applies to approximately 60 percent of the average tax bill. The lack of Save Our Homes "portability" is a real problem that needs to be addressed, but the way Amendment One provides it creates some serious constitutional concerns. A legal expert hired by the Legislature warns of "100 percent certainty" of a constitutional challenge to the amendment on the grounds that portability violates the U.S. Commerce Clause. Besides the legal concerns, another economic report commissioned by the Legislature for $500,000 states "Portability increasingly shifts the tax burden from longer-term residents to newer, less affluent, homeowners and to non-homestead properties." The Legislature has largely ignored these experts - the voters should not.

Perhaps most importantly: If voters approve this new amendment, future attempts to reform non-homestead property taxes will be extremely difficult. Florida can, and must, do better. Sound advice for amending the constitution is "when in doubt, leave it out." But we are convinced there is more than just doubt, there is plenty of evidence that this is not the right thing for Florida's taxpayers and economy. Some people say, "well at least its something." Instead, we caution this is a step backwards.

Dominic M. Calabro, is president and CEO of Florida TaxWatch.

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