Tax-swap amendment swamped
There’s never a dull moment when it comes to government officials. Just when they begin to do some creative thinking, someone pulls them back into the stagnation that is rampant at every level of government.
Last week, that someone was Judge John C. Cooper, a Leon County circuit judge. He ruled that Amendment 5, which was scheduled to be on the Nov. 4 presidential election ballot, was to be removed. He stated that "the ballot title and summary of Amendment 5 fails to fairly inform the voter in clear and unambiguous language of the chief purposes of the amendment."
As you may recall, the chief purpose of the amendment was to reform the Florida property tax system by eliminating the portion of property taxes that the state government requires to fund schools. The savings on property tax bills would be between 25 percent and 40 percent. In addition, the amendment also provided for capping at 5 percent the annual rise in assessments for non-homesteaded properties, as well as other property tax restrictions. The shortfall in school funding would likely be offset by cutting state budgets and an increase in the sales tax.
The objection to the amendment’s wording relates to the replacement funding for schools. It implies that the funding would be permanent, but apparently only guarantees funding for one budget year. The action to remove the amendment from the ballot was brought by a coalition of education and business interests who felt the wording was misleading to voters.
Naturally, the amendment has the backing of the real estate community. The industry feels the adoption of this amendment would have a positive effect on the real estate industry, and by extension the local economy, which is very dependent on the real estate market.
The decision is being appealed, however, in order for the amendment to make it on to the November ballot in time, a higher court must make a decision by mid-September.
Ironically, the same day Amendment 5 was pulled from the ballot, the second quarter existing home sales figures were published. Although the median sales price fell 16 percent in the Bradenton-Sarasota market, the number of properties sold increased not only over the 2007 sales but also over the first quarter of this year. In Manatee County alone, there were 291 more homes sold in the second quarter of 2008 than in the first, with many of these sales on Anna Maria Island.
Certainly the affordability of properties is one of the reasons for this turn around, combined with a sustained 30-year conventional mortgage rate remaining just above 6 percent. Buyers are also starting to feel the market has hit the bottom, which will inevitably have an impact on the upcoming prime buying season.
And don’t discount the encouraging news coming out of Florida relative to property tax reform. The legislators have made some gutsy decisions and suggestions to send the message that Florida is serious about tax reform. That message is not lost on potential transferees from the Northeast and Midwest, who may have been holding back for the last few years waiting to see where they should spend their retirement dollars.
Everyone is in favor of adequately funding the public school system. However, if Florida doesn’t enact a property tax system that is fair to all property owners, we will be unable to attract new residents and ultimately erode our tax base.
Even if Amendment 5 can’t be fixed and put back on the ballot for all Floridians to vote on in November, we still need to encourage our elected officials to keep their creative juices flowing and resist stagnation.