Thursday, May 03, 2007

Florida's Property Tax Debate

Right now there are many cities debating whether to lay staff off or give them a raise. It all hinges on the property tax issue.

Local governments have grown fat and greedy. In addition to escalating insurance, they have decided to escalate property taxes as well. Perhaps their reasoning is that if you can afford to buy a home, you can certainly afford at least $2000 or more a year in property taxes. In combination with high homeowner's insurance (another $2000), many people are being driven out of Florida all together and homes are now beginning to sit on the market. Real estate brokers are getting nervous. So is the Governor. That is why Florida's legislature is toying with the idea of revoking ALL property taxes and increasing sales tax, instead.

Why sales tax instead of property tax? It would be an asset in so many ways. First, it might encourage savings, and the fact that the American people aren't saving has been a great worry to many politicos and pundits.

Second, it would tax fairly, across the board. What you use is what you pay for. Home and property owners still pass their increases on in rent: That's true to a certain extent. But this would ensure that our many visitors and tourists would also help us with our taxes: You play, you pay.

Of course there are the sticky situations we must also be willing to face: What about the people who start to buy everything out of state? We aren't merely a mobile community anymore: We are a GLOBAL one. We can turn to the internet and buy that expensive emerald ring on Ebay and pay no taxes whatsoever.

For the majority of Floridians, spending will go on as it always has. But if we don't remove those crippling property taxes, there will be such an economic slump that there will be much less prey to feed on. As we know, parasites need hosts.


Hans said...

Your dead on with local governments getting fat and greedy. The commercials bemoaning the loss of services if the state cuts taxes and the need to call your state legislator and tell them you don't want your fire and police departments cut have already started.

The Lazy Iguana said...

Nothing is free. And visitors do pay taxes. They pay booze taxes, restaurant taxes, hotel bed taxes, rental car taxes, cruise ship port taxes, airport taxes, and so on.

The State has to get money from somewhere. And so do local governments. Roads needs to be maintained. So do sewers and water supply systems. And this takes money.

As for raises for County employees, how much is a sewer worker worth to you? How much should they get paid to keep all the shit flowing? Do YOU want to put on the suit and go down there to wash down a lift pump? You know what is there. Not just what you flush, but also the stuff that finds its way into some storm drains. Dead possum and poop anyone?

I do not think the "no property tax" model is realistic. Part of the reason why taxes have shot up is because of the existing tax plan. In my neighborhood you can take two identical houses - one person is paying $1500 a year and the other may pay $3000 or more. Why? One person "locked" their rate 20 years ago, the other person is a new home owner. One person may have an artificially low rate, while the other has an artificially high rate.

Too much rides on property tax. Most notably public schools. The right has been trying to do away with public schools for a long time now. EVERYONE can afford a fancy $10,000 a year prep school right? No?

By the way, have you heard the new casino plan? It is great. Ill post about it for tomorrow! Don't miss it!

Hans said...

Everyone understands the need for taxes. We can only hope that the state and local governments are good stewarts with the money and spend it wisely. It's our job to hold them accountable at election time. As I've said in regard to a previous post, we have to correct the property tax structure and make it more equitable (and simple). My opinion is to do away with the Save Our Home laws. Tax property based on actual market value and make the mil rates realistic. K.I.S.S. (keep it simple stupid). It may require a couple of years to make the transition but I think it will be easiest and fairest in the long run.

Sewer workers are paid by the water department. Usually run by the city or county but could be a private run company. Aloha Utilities in Pasco County for example. The money for them comes from water and sewer bills, typically. Not taxes.

Ed Abbey said...

I would rather have a higher sales tax and no property taxes. As someone who is an avid saver towards retirement, I can control my tax expenses and thus runaway spending by reducing my consumption of taxable items. With property taxes I have no choice.

Schools should be privatized as government control of them is unconstitutional.

Local governments should be run like businesses. Right now, they keep expanding their budgets because they can and there isn't much I can do short of moving to another tax district.

The Lazy Iguana said...

Higher sales tax would hurt business. Think of the towns along the Georgia / Alabama border. Simply driving across State Lines would mean you do not pay FL sales tax.

Public schools are needed. Private schools would take us all back to a time when only the rich can afford education. I think this is the plan behind getting rid of public schools. The rich never use them anyway, so why would they want to pay for them? So that some child of middle class or even worse lower class parents can one day be the boss of their kid? Can't have that.

Government can not run "like a business" because it is NOT a business. A business is here to make money. Government is here to provide for the public good. Do you really want the police department to be run as a business? You think that parking enforcement sucks now, just wait till the cops have to hand out enough tickets to fund their operation AND generate money on top of that.

Likewise, a business can not run like government. And for the same reasons.

This property tax issue is HUGE. I think that there are parts of it that are unfair. A first time home buyer will get raped up the cornhole under the current plan.

But what we do not need to do is rush into this all willy nilly. The plan CAN NOT have too much of an impact on State and Local government budgets. The disruption will be too much. And it needs to be phased in over time to allow governments to adjust.

Larger areas like Miami-Dade could just impost a County sales tax or something, and if Borward matched them then South Florida could still float. But what about Lulu Florida? Or Clewiston? Small towns would be hit VERY hard.

AQ said...

I think I'm with Lazy on this one.

If sales tax was the only income for our government needs, I believe we would lose a good portion of our tourism industry.

Perhaps doing away with Save-our-homes would allow the government to lower the millage rate, thus creating a more equitable property tax structure.

Just one of many things that should be considered.

The Lazy Iguana said...

Yea, the "Save Our Homes" law probably does need to go. It was an excellent idea, but it just did not seem to work out very well. This happens a lot it seems.

A good compromise is to look at median home prices County by County and adjust based on that. Here in Miami a $400,000 home is really not that big, but in Ocala FL $400,000 will buy you a horse ranch.

Set a cap on the tax rate for homes at or below the median value. This would help the majority of people. Working people.

Of course the median value of a house in the Keys is not the same as the median home value in Miami-Dade County which is not the same as a home in Everglades or Hendry County.

If you live on a $15,000,000 estate on Star Island then what are you bitching about? Can't pay the taxes on your house? Well then move. Or sell the seaside mansion and move into a median value home. I will not cry too hard for you.

This way most of us get a tax break, the sales tax would only need to go up one or two percent, and so on.

I do not think this will happen. Not when you have the speaker of the FL house saying that property taxes are "immoral". They want them gone. Who will benefit the most? Those living in the largest most expensive houses on the best parcels of real estate in the State. People like Madonna and Sylvester Stallone. And really - they need the tax relief the least.

daveawayfromhome said...

Lazy, you're such a blasphemer! Those people worked hard for their money. Yes, they and they alone are responsible for the millions of dollars they have, and if they want to spend it all on oversized houses that deny the Public beach access, well, that's obviously God's will, isnt it?

America is not a collective. It is a group of individuals whose ancestors endured great hardships so that today we could scoop up wealth in great handfulls and clutch it to our chests while trying to grab more with our feet. If some cant cut it, then they're losers who should just go back to where ever their ancestors just couldnt cut it either.

Seriously, taxes are not the problem. That's a successful talking point that Republicans who dont want to share with the society that makes their wealth possible. The problem is an unfair tax system. How many of you live in a town where most or all major companies have recieved major tax breaks as incentive to move there.
Look at the arguement used for corporate tax breaks: The company comes there (because of the breaks), everybody makes money working the jobs created by the company, and tax revenues go up in the form of taxes paid out of the income of those workers from their new jobs. Net result: big corporate profits, and a tax burden on the people who do the work to create those profits. A government needs money, and it's got to come from somewhere, someone's going to get taxed. Is this system fair?

Three Score and Ten or more said...

Iguana, anyone running to Georgia to avoid sales taxes is simply running the wrong direction. I kid you not. I am surprised that no one has argued the regressive nature of sales tax, which is the oldest argument of its kind (and the argument that is hinderning the "fair tax' plan.

daveawayfromhome said...

It's only a "fair tax" if it is taxing fair wages. There is a massive imbalance between the highest and lowest wage-earners in this country. Until that's addressed, you'll have a hard time convincing any but the upper earners of the "fairness" of something like a regressive or flat-tax.

Ed Abbey said...

Lazy - By running the government as a business, I meant that it does not run in the red as the Bush administration currently does. I see nothing wrong with the government spending only what they take in.

Why should I, assuming I have money, not be able to get a better education than someone without money? When I was in high school, we could only go as fast as the slowest learner and now with Bush's 'no child left behind' bill, it has only worsened. I think I have the right to buy the best education money can buy for myself or for my children. Just like I have the right to buy a better car than someone who works at McDonald's for a living.

I live right by a border with a difference in sales tax and gas tax. Anyone can tell you that massive border migrations to save on taxes is a bunch of hog wash, especially so with gas prices as high as they are. You quickly spend more in gas than you save in taxes.

daveawayfromhome said...

Ed, for me, at least, the issue is not whether you should be able to buy a better education for your child if you are able. You should. Where I run into trouble is the idea that because someone has more money, their child is entitled to a better education.

You're right about NCLB, though. The test-them-with-a-one-size-fits-all-standard promoted by that law is destroying a generation of the nation's best and brightest.
I dont know how old you are, but I remember when I was in grade school, classes were divided into A,B and C groups, with the smarts level pretty much falling out as implied. Now, due to worries about neglecting the "slow learners", and "self-esteem" issues, all the kids are mixed together, with the obvious result which you've already stated: teaching to, and at the speed of, the lowest common denominator.

Ed Abbey said...

Dave - My hackles get raised everytime I discuss government run education. I grew up before open enrollment and spent my whole educational career fighting the system because I wanted to learn at a faster pace but was held back by others in my class who if given the option, wouldn't go to school at all. Because I grew up in a rural area, my options were limited and as a result, I graduated valedictorian of my class but was still about a year and a half behind my peers educationally when I got to college. I spent three years locked up in the library teaching myself what I couldn't get in high school because I couldn't go elsewhere unless my parents packed up their farm lock, stock and barrel. Had my school been privatized, they would have been forced to cater more to my needs if they wanted my (parents) tax money.

On a side note, I have always felt child truancy laws should be repealed. If a kid doesn't want to be in school, I say we hand them a mop and tell them to get to work instead of forcing them to go to school and slow everyone else down with them. Bush's NCLB act only compounds this effect.