Property Taxes in Florida

Spring 2009 CSANews Issue 70  |  Posted date : Apr 30, 2009.Back to list

By the time you read this, you will be back in Canada. How do I know? Well, because that is where we are mailing your magazine. A wise man once said that you should always open with a joke. Be patient, they will get better with time.

Like many of you I spent the winter in Florida,  which meant that I got a steady dose of Florida politics in my morning paper. What always seems to be the hottest topic in Florida politics? Taxes, particularly property taxes, and this winter was no different.

As all of you who winter in Florida are aware, seasonal residents shoulder a wildly disproportionate share of the property tax burden. It is not uncommon for a seasonal resident's property taxes to be anywhere from three to 10 times higher than those of their homesteaded neighbours. As Florida doesn't have a state income tax, there is considerably more pressure put on the property tax base to raise revenue for those key government services which are primarily the responsibility of county governments.

I have lost count of the number of property tax caps and exemptions enjoyed by our full-time Florida neighbours over the years,  and the snowbirds are always left to pick up the slack. Why is this the case? The bottom line is that it comes down to politics. Snowbirds cannot vote in local and state elections. Imagine that you are a politician who needs to raise revenue to fund the services which the people in your community require. If you absolutely have to raise someone's taxes and you are faced with a choice between those who can vote and those who cannot,  well, it's not hard to figure out which choice most politicians will make.

I have heard some say, what is the big deal? Property values are plummeting and assessment-based property taxes are coming down for everyone. While still far from equitable, it is certainly true that this has provided some short-term tax relief but,  unless one is of the view that property values will never rebound, this is not a long-term solution.

Yet it is not as if Florida politicians are not aware of how vital snowbird dollars are to the health of the state's economy. In 2007,  Canadians spent $2.1 billion in Florida and that obviously doesn't include the money that our American snowbird friends from the northeast contribute. Florida legislators know full well that they are sitting on a ticking economic time bomb. The simple fact of the matter is that Florida has become far too dependent on property taxes which punish small business and the important snowbird economy,  but most of the politicians would rather cross their fingers and put the tough economic choices off for as long as they can.

If there is any good news in any of this,  it is that some politicians recognize that the economy may well be about to hit the wall. Amendment 1 was passed by voters in January of 2008. With the first nod to snowbirds in living memory, this resulted in a 10% cap on property assessment increases for non-homestead properties. Previous to this,  there was absolutely no cap for snowbirds so while it is better than nothing, especially when property values rebound, we still have a long way to go.

The latest plan to surface in Tallahassee calls for reducing the 10% assessment cap (under Amendment 1) to 5%. It still falls short of the 3% protection that full-time Florida residents receive, but at least it is heading in the right direction. If approved by voters in 2010, the lower cap would result in $100 million in savings for businesses and out-of-state homeowners in 2011, $185 million in 2012 and $266 million in 2013. The figure increases over time as the benefit compounds, but also because hopefully the economy and market values will start to rebound by then.

Politically, the hope here is that Governor Charlie Crist will be able to sell this idea as part of a larger economic stimulus package and, as CSA President Don Gardiner alludes to in the president's column, "stimulus" seems to be a very popular word these days with politicians of all political stripes.

Again, while it doesn't fix the problem, it is at least another step in the right direction. Rest assured that the CSA will keep hounding Florida's politicians until the problem is finally fixed.

In other news, I had many RV owners approach me over the winter with concerns regarding the class of operator's licence required to obtain insurance on their recreational vehicles. It seems that there is significant variance from province to province, which is causing some confusion. It's an issue that we are looking at and we will report back right here in CSANews.

Have a great summer.