Increasing the Homestead Property Tax Exemption
A tax shift is not a tax cut: Vote No on SJR 1774 and House Companion
SJR 1774 by Senator Tom Lee and the House companion is a proposed constitutional amendment that would increase the homestead exemption by $25,000, creating a super-exemption of $75,000 for the first $100,000 of the value of homestead property. While homestead property owners may appreciate the exemption, it shifts the tax burden to our local business and non-homesteaded property owners.
- This is a tax SHIFT not a tax CUT. The tax burden will be placed on local business owners and non-homestead property owners who must choose between more taxes or fewer services.
- Small counties hit the hardest: Florida’s 29 fiscally constrained counties that are at or near the 10 mill cap will have no choice but to cut the limited services they are barely able to provide today.
- Citizens will get less with less: The additional exemption means that counties that choose to maintain their current millage rates must make tough choices about the services provided to their citizens.
County by County Impacts:
The spreadsheet reflects the fiscal impact to local governments, by county, of the proposed Homestead exemption increase, updated to incorporate the 04/28/2017 Senate amendment which shifted the range from between $75k-$100k to $100k-$125k. The total impact by 2016 numbers is $587,460,139. Adjusting for inflation (using Revenue Estimating Conference numbers), this impact is projected to grow to a total in each year as follows:
- 2017: $603,791,531
- 2018: $620,516,556
- 2019: $637,704,865
- 2020: $655,305,519
- 2021: $673,260,891
This analysis uses the same methodology on the property tax rolls that was originally used by the Revenue Estimating conference to estimate the impact of the original proposal that exempted between $75k-$100k. It just changes the range to between $100k-$125k.
# of Homes Impacted and Individual Savings
This spreadsheet shows that 4.3 million homes receive the first Homestead exemption, but just 2.4 million would benefit from the most recent proposal. Also of note, when calculating average savings per owner, you can calculate the average per affected homeowner or all homeowners. The latest proposal would save $242.86 for the average home receiving the benefit, but save just $136.39 on average when favoring all Homestead properties including those not receiving the 3rd exemption.
How to determine local impact:
HOW DO I DETERMINE “MY LOCAL IMPACT?”
Immediately consult with your Property Appraiser and County Administrator/Manager, as well as, finance staff to ascertain the fiscal impact this proposal will cause. Consider likely policy choices that this impact will create: which services are most likely to be cut or eliminated; what would the consequences of any rate increase be?
From FY 2008 to FY 2014, County revenues and expenditures have declined by more than $5 billion. This decline has been accompanied with reductions in services and investments in critical infrastructure needs. Moving forward, as state and local economies rebound, local communities will have to balance the need for essential resources to provide services and infrastructure with strategies inclusive of tax reductions and the removal of barriers to growth that will aid in fueling a sustained economic recovery.
The Florida Association of Counties SUPPORTS tax reform measures that simplify administration and provide an economic boost to Florida’s taxpayers while at the same time considering and minimizing the collective and cumulative negative impact on local revenues, including state shared and local discretionary revenue sources that are critical to local governments in providing community services. Potential tax proposals that are of major concern to FAC include, but are not limited to:
A. Communications Services Taxes
SUPPORT amending and/or revising current law in a manner that is: 1) revenue neutral; 2) simplifies administration and collection of the current tax; 3) provides for a broad and equitable tax base; 4) provides for enhanced stability and reliability as an important revenue source for local government; and 5) provides the opportunity for market-based growth.OPPOSE legislation that would revise current law in a manner that significantly reduces current local government related revenues.
B. Sales Tax Exemption on Commercial Leases
SUPPORT legislation that would phase-in a reduction and eventual exemption of state sales tax on commercial leases, but preserving and “grandfathering-in” existing local (county) option sales taxes.
C. Property Taxes – “Elimination of Recapture Provision”
OPPOSE legislation that would eliminate currently existing recapture provisions for homestead and non-homestead property.
D. Aviation Fuel Taxes
OPPOSE legislation that would modify current aviation fuel taxes in a manner that would negatively impact counties or the state’s ability to provide resources in support of aviation transportation related operations.
E. 10% Non-Homestead Assessment Limitation
SUPPORT legislation that would extend current 10% assessment increase limitation on non-homestead property.
Local Revenue Enhancement/Modification
The Florida Association of Counties SUPPORTS measures that enhance the effectiveness of existing local revenue sources to meet current and future public service demands. Potential proposals that are of major interest to FAC include:
A. SUPPORT modifications to existing laws governing local discretionary sales and gas tax revenue sources to provide greater simplification, flexibility and more efficient administration and management.
B. SUPPORT expanding the eligibility to levy the Charter County Transportation Surtax to all counties.
C. SUPPORT indexing local option fuel taxes to annual adjustments of the CPI.