The Florida Legislature is making voters an offer they’re unlikely to refuse. A tax break worth an average couple of hundred dollars.
It’s coming in the form of a ballot question in November 2018: Should the homestead exemption be expanded by $25,000?
Voters almost certainly will say yes – although they should think hard about the potential cost: cutbacks in essential services like parks, libraries, community health centers and possibly public safety. Schools, at least, would be unaffected.
For while an increased homestead exemption stands to benefit individual homeowners, it will leave big holes in the budgets of local governments. In Palm Beach County, the collective loss to city and county governments and other taxing agencies is a potential $62.7 million.
For cities with little ability to tap alternate sources of revenue, like Lake Worth, long-planned improvements could be delayed again. “It feels like we have to do our jobs with our hands tied behind our backs,” Mayor Pam Triolo told Post reporter Wayne Washington.
Legislators behind this amendment, notably House Speaker Richard Corcoran, R-Land O’Lakes, crow that they’ve passed a major tax cut. “For just the third time in state history, the people will see real tax relief in homeownership,” Corcoran boasts in a message to supporters.
But as Todd Bonlarron, Palm Beach County assistant county administrator, puts it: “They call it a tax cut. We call it a tax shift.”
Exactly. If you make an exemption for particular homeowners — those who declare their Florida property to be their primary residence — you make the tax burden that much harder on others, such as small businesses, people who own more than one home, and renters.
At least a half dozen Palm Beach County municipalities, by Bonlarron’s estimate, are at the limits of their taxing authority — or close to it — and will be hard-pressed to retrieve the revenue they’ll lose if this exemption becomes law. Think cities with low property values, high unemployment and spotty economic activity. How will they cope, other than cut services?
County government alone would lose some $30 million. That’s already sparking talk about tax increases to restore the balance sheet. Commissioner Melissa McKinlay has floated the idea of a half-cent sales tax dedicated to fire and rescue services — a maladroit approach sure to spark resentment toward the elected officials who coaxed the public to approve a penny hike a mere six months ago.
The county, which still has taxing authority to spare, could simply increase the property tax rate. But “we’re not looking to raise taxes,” Bonlarron told the Post Editorial Board. “It’s not something we want to do.”
But commissioners will feel the squeeze. Although the county collected a record $1.82 billion in total revenue for fiscal year 2016, officials are continuing to make up for losses tied to the Great Recession. It won’t be an easy call.
For state lawmakers, it’s a nice deal. They get to declare victory in saying they’ve cut taxes, and leave the hard choices to the counties and cities: raise taxes — if they can — or cut services.
The homestead exemption amounts to a bonus for living in Florida. In general, if your Florida home is your primary residence, you get to exempt $50,000 of the assessed value from property taxes. If the amendment gets 60 percent of the vote in November 2018, the exemption rises to $75,000.
It sounds wonderful if you’re that homeowner. But as Sen. Jeff Clemens, D-Lake Worth, says, the amendment “exacerbates” an already uneven property-tax system. He called it part of a broad Republican strategy to “starve” local government and target poor people.
That may not be this proposal’s intent. But it surely would be the result.
A greater burden looms for small businesses, renters, people with more than one home.