Monday, February 19, 2007

Florida Property Tax News: Florida Property Tax Committee Proceedings

Very much in the news these days are the public meetings of the Florida Property Tax Reform Committee. The Committee was appointed by Governor Jeb Bush. The Committee is holding hearings around the state, seeking public input.

Eight meetings are scheduled in various locations across the state. On February 13, 2007, the Legislative Hearings on Property Tax Reform were held in Miami. The author of this blog attended, both to hear what others had to say and to put in his own two cents worth.

The Committee’s Charge

The Committee was charged with responsibility to consider, at a minimum, the following:

· Consequences of property tax exemptions and assessment differentials;
· Appropriateness, affordability and economic consequences of property taxation levels in Florida;
· Alternative methods of assessment, including, but not limited to, split-rate and land value taxation;
· Replacement alternatives to property taxation as sources of public funding, including increased sales taxes; and
· Limitations on local government revenue and expenditures.

Topics Addressed

Topics addressed at preliminary sessions of the Property Tax Reform Committee and at Legislative Hearings on Property Tax Reform convened at Panama City, Jacksonville, West Palm Beach, Fort Lauderdale and Miami, include the following ideas:

· Assess business property based on current use only, instead of “highest and best use” value.
· Cap tax revenue growth for individual local governments.
· Cap tax increases on individual properties or classes of property.
· Full or partial replacement of the property tax with other forms of taxation.
· Assess properties using a moving average value of several years’ assessments instead of using just the current year’s value.
· Simplify the “Truth in Millage” annual notice of proposed property taxes to be more easily understood by taxpayers.
· Increase the amount of homestead exemption and/or index it by percentage of value.
· Institute “portability” or transferability within Florida of the Save Our Homes cap, in whole or in part.
· Phase-out the Save Our Homes tax preference.
· Partial-year assessments of improvements to real property.
· Improve or limit agricultural use classification regulations.
· Protect homestead-related property tax benefits when property is taken for public use by eminent domain.
· Protect homestead-related property tax benefits upon relocation required by military service.

Further Proceedings

A preliminary report was issued by the Committee in December 2006. A mid-term report is due on or before March 1, 2007, and a final report no later than December 1, 2007. Ultimately, the Committee is charged with responsibility to issue recommendations to improve property taxation in Florida through a comprehensive approach, with an emphasis on simplifying the system for all taxpayers.

The responsibility with which the Committee is tasked is fraught with difficulty, since any adjustment to the current system has repercussions throughout the remainder of the property tax administration system of the State. Think of it as a water balloon; if you squeeze one side, the volume of water displaced expands the rest of the balloon. The metaphor is not exactly Archimedean, but it does give you a visual image of the problems involved.

Notably, most of the changes being considered may require a constitutional amendment before implementation. This means that the most the Legislature can do is propose constitutional amendments. After that, it will be up to the voters of the State of Florida whether the proposals will be adopted.

Daniel A. Weiss is a former Attorney Special Master for the Miami-Dade County Value Adjustment Board with over 25 years property tax experience. Mr. Weiss represented the Miami-Dade County taxing authorities in litigation and appeals between 1981 and 1995 and has since represented taxpayers in property tax matters. Mr. Weiss was named one of the top lawyers in real estate, zoning and land use by South Florida Legal Guide 2007. In Florida Super Lawyers 2006, Weiss was named one of the top 6 local government lawyers in South Florida.

In Florida Trend magazine™'s Legal Elite's issue, July 2004, Mr. Weiss was selected by his peers as one of the top 30 government lawyers in the State of Florida.

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