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Old 10-30-2007, 02:50 AM
 
Location: western East Roman Empire
9,309 posts, read 14,205,607 times
Reputation: 10017

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According to news reports, the Florida House accepted the Senate's watered-down proposal.

Unlike the previous proposal, the SOH provision will not be phased out.

The exemption will be increased from $25,000 to $50,000, but this excludes the proportion of taxes allocated to schools, so the actual exemption is increased to around $40,000. A meaningless figure in the more expensive regions of Florida.

Rises in assessed values on non-homesteaded properties (businesses and second houses) will be capped to 10% annually.

Businesses will enjoy a $25k exemption on so-called tangible personal property.

SOH owners who sell their houses and buy a more expensive one will be able to transfer up to $500k of homesteaded value (portability).

SOH owners who sell their houses and buy a less expensive one will be able to transfer a proportion of their homesteaded value (how this works is not specified in the reports I've read).

Overall, the increase in the exemption in the SOH value is virtually meaningless. A 10% cap on business and second-home assessments also has little meaning.

The only thing meaningful about this proposal is portability, and for the most part on the way up, to a lesser extent on the way down.

My interpretation is that this proposal for the most part favors the wealthy who want to move to a bigger, more expensive house, at the expense of the school system (which mostly serves the relatively poor).

While the tangible property tax exemption will help businesses a little, overall this proposal will do even less to help boost the Florida economy, except perhaps in an indirect way.

The problem with the Florida economy is not that real estate prices and the real estate market have stagnated. The problem with the Florida economy is that spending on real estate has overcrowded other, more productive investment in other types of enterprises, potentially more competitive in today's global economy, and local incomes have stagnated. Since this proposal does little to reflate the real estate bubble, except maybe on the high end, its overcrowding of the rest of the economy may not increase.

The exemption on the tangible property tax on businesses and the 10% cap on business property assessments may help to stave off the flight of businesses from Florida, but little or nothing visible is being done to encourage the development of productive, competitive enterprises that generate increases in local incomes.

In short, a sop. At least the proposal does not phase out SOH, like the previous one.

Talk of making further changes down the road is dangerous: constitutions should be documents made to last, to withstand the test of time, not scrap paper to be altered in reaction to the trend of the day.

From the economic standpoint, voting yes or no is indifferent. From the constitutional standpoint, voting yes could set a dangerous precedent and send a dangerous message that the constitution is something that can be tinkered with based on the whim, the bubble, the speculation of the day, regardless of sound economic and social principles.

What's your opinion?
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Old 10-30-2007, 03:17 AM
 
1,573 posts, read 4,052,374 times
Reputation: 527
"Save Our Homes" is nothing but the government choosing winners and losers. In this case it is favoring people who already own a house, vs. those who would like a house. It is actually anti-free-market. The property taxes being high is a function of the houses being expensive, which in turn is the result of market forces. The government is shielding people from market forces, market forces that are increasingly saying "not another McMansion". What is needed in Florida is more affordabel housing, not more half-million dollar homes.
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Old 10-30-2007, 05:36 AM
 
12,867 posts, read 14,863,537 times
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i agree with magnulus. i submit additionally that it will not even favor the homeowner, as it certainly will do nothing to help stabilize the falling property values, and there is no way that the property tax assessors will pass this depreciation onto the homeowners (since they did not this year). it was a big disappointment as far as a tax plan, but actually not a big surprise.
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Old 10-30-2007, 05:44 AM
 
2,143 posts, read 8,005,956 times
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The only solution is to cap assessments AND millage rates. Controlling one without the other doesn't solve anything.

Counties must learn to live within a budget.
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Old 10-30-2007, 05:50 AM
 
Location: The 'burg
428 posts, read 1,468,642 times
Reputation: 279
Does the proposal say anything about "highest and best use"? this borderline criminal tax assessment measure needs to be removed immediately. This is one way that the local governments are taxing mom-and-pop (and some not so m&p) businesses out of state.
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Old 10-30-2007, 06:01 AM
 
Location: Satellite Beach, FL
149 posts, read 699,496 times
Reputation: 43
Wow. Portability is the only real change here...



Prodromos Borboroglu
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Old 10-30-2007, 06:06 AM
 
1,573 posts, read 4,052,374 times
Reputation: 527
Quote:
Originally Posted by floridasandy View Post
i agree with magnulus. i submit additionally that it will not even favor the homeowner, as it certainly will do nothing to help stabilize the falling property values, and there is no way that the property tax assessors will pass this depreciation onto the homeowners (since they did not this year). it was a big disappointment as far as a tax plan, but actually not a big surprise.
Property values have to fall, though. The prices for homes in Florida aren't even remotely realistic. The falling property values are really only worst if you own a house (there are indirect effects, such as slowing economic growth, but the clear losers here are homeowner's, not renters). Nobody is stopping to ask if trying to fight falling home prices is in danger of creating a "moral hazard" where risky speculators could be rewarded. In the wider sense this debate is happening all over the country, especially on the coasts.

My own opinion is taxes aren't that bad in Florida. If anything the state should be spending more money on schools and helping out underperforming districts. I'd rather see the government not try to "solve" a problem that would cut tax revenues. It is time for Florida to transition from a low tax state to one with more taxation to pay for services. The free lunch is over. If some grey-hairs can't live with that, they need to get over themselves. Florida doesn't need to be a retiree haven anymore (at all costs), we need to start growing beyond being "God's waiting room" with the only growth related to real estate. The state should find a way to help out people in a tax crunch but things need to be kept in balance.
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Old 10-30-2007, 06:15 AM
 
12,867 posts, read 14,863,537 times
Reputation: 4459
now i don't agree with magnulus :0). i don't see florida as a particularly low tax state, nor do i see how spending more on schools will solve the underperformance of students in certain districts.
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Old 10-30-2007, 07:10 AM
 
Location: tampa fl-Soddy Daisy Tn
192 posts, read 856,003 times
Reputation: 157
Schools are exempt from tax cuts in this bill, too bad as they WASTE dollars at an alarming rate with students who continue to fare worse than previous generations that did not have all the bells and whistles.The gray hairs are not the problem, they are just trying to survive as many other middle class folk here, and require less "services". The government must do as all households do, prioritize their spending and BUDGET. This bill was a waste of more taxpayer dollars on more "special sessions" that accomplished nothing. Dear elected leaders or whatever you call yourselves you will be remember at election time.
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Old 10-30-2007, 07:22 AM
 
Location: western East Roman Empire
9,309 posts, read 14,205,607 times
Reputation: 10017
Quote:
Originally Posted by Angler View Post
Does the proposal say anything about "highest and best use"? this borderline criminal tax assessment measure needs to be removed immediately. This is one way that the local governments are taxing mom-and-pop (and some not so m&p) businesses out of state.
This past week or so, between the House and Senate (I can't remember which), there was a provision that addressed the "highest and best use" issue, but in the final proposal it was withdrawn.

On the fiscal policy issue, from my perspective, Florida is still a relatively low-tax/low-service state and should remain that way: if you want a high-tax/high-service state, go somewhere else; there is beauty in diversity and choice, including state-level fiscal policy.

The problem is monetary policy, which is set at the national level, and how Florida policymakers - like those in many other states, especially on the coasts as mentioned - have reacted to it, spending recklessly on current consumption (local government staff salaries, for example) and investments with relatively poor or negative returns.

In any case, if property prices and assessed property values come down, the property tax problem solves itself. However, as some have mentioned, there is still the risk that assessments will remain above actual market prices and/or that millage rates will be increased.

So, despite the cap on assessment increases and the current reality of falling market prices, and the high probability of further falls in the foreseeable future, homeowners are still not completely safe from reckless-spending policymakers in the state of Florida.
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