Exposing Misleading Anti-Amendment 1 Propaganda Mailers

Dirty political tactics adopted by opponents of Amendment 1

January 26, 2008 – Palm Coast, FL – Negative political ads have come to the Amendment 1 question. Misinformation mailers began arriving at local homes over the past few days leaving little time before Election Day to refute their grossly misleading claims, claims aimed at scaring voters to cast their ballots against the Amendment 1. Two of the offending organizations are Citizens for Home Rule and Florida is Our Home, Inc. There are intelligent and rational people on both sides of the Amendment 1 issue. If you have yet to decide which way to vote, you can see the facts here (click here and read all the pages) and by reading below. Don’t be swayed by the emotion laden rhetoric found in the recent mailings.

Florida’s tax system needs fixing. Too much of the government’s budget is funded by property taxes, partly because the state does not have an income tax. The Save Our Homes amendment caps increases in assessed value for homesteaded Floridians at 3% per year. Intended to prevent retirees from being forced out of their homes by rising taxes brought on by increased property values, it was a noble gesture. But like many noble gestures, it created an unfair and perpetuating entitlement. Property taxes paid by non-homesteaders and recent arrivals are often more than double that paid by their neighbors. Renters suffer too because rental property is not homesteaded and has no cap on assessment increases. Rising property taxes cause rents to rise.

State legislators failed to fix the problem with Amendment 1. What they did do was throw some benefits to just about everybody. It provides tax relief, not tax reform. Here is a summary of the major highlights of the amendment:

• An additional $25,000 homestead exemption on values greater than $50,000 and up to $75,000. This exemption does not apply to school district levies. Expected reduction in taxes ranging from $119.62 to $269.04 (depending on your tax district).
• $25,000 exemption for businesses (Tangible Personal Property). Maximum reduction for a business with the full $25,000 of personal property ranges from $310.07 to $459.49 (depending on your tax district). Affects all taxing authorities.
• A 10% assessment cap on non-homestead properties. This limitation does not apply to school district levies.
• Save Our Homes portability, up to $500,000 of value for a home of the same or greater value and a percentage being applied on a home of lesser value. Affects all taxing authorities.

Here are some of the most egregiously misleading statements from the mailers:

“Out-of-state property owners get special protection.” FALSE. They benefit only if property values increase more than 10% in any year. While some non-homesteaded property is held by out-of-state owners, much is owned by Floridians. And what’s wrong with out-of-state owners? If they own a vacation or second home, they are not here full time, thus placing a lower burden on local services and schools than do full time residents.

“Many Floridians will see taxes rise.” – This is probably true, but any tax increase will not be caused by the amendment. Taxes will likely rise for two reasons:

• The total taxable assessed value for entire taxing districts will probably drop, partly due to increased exemptions. partly because of declining real estate values (just value), and due to a decline in new construction. When the taxable base drops, local governments have to raise the millage rate to maintain the same revenue as last year. If budgets increase, the millage rate will rise even more, bringing about tax increases. 
• The assessed value for most homesteaded properties will rise, even though just value decreases. That’s because the property appraisers office is required to recapture the difference between true and assessed value. In other words, if your home’s value decreases, your assessed value can still increase up to 3% so long as the just value remains above assessed value. The likely increased assessed value for homesteaded properties combined with the probable increase in millage will result in increased property taxes for many. This problem is not caused by the amendment. It exists within the present system.

The Florida is Our Home mailer urges voters to vote against the amendment. It calls it “a TAX SCAM our schools can’t afford,” and asks “Where will Amendment 1 put Florida schools?” They fail to mention the following facts:

• The increased exemption does not apply to school levies.
• The 10% cap on non-homesteaded assessment increases does not apply to school levies.

The most rational reason to vote against the amendment is that it does not fix the problem of inequitable tax distribution. It is not the tax reform we were promised by legislators. Some argue that by accepting a half baked measure, we postpone a real solution.

The main reason to vote for the amendment is that it will save nearly everybody money. Portability will probably give some people more incentive to move, bringing a much needed boost to our stalled real estate and construction sectors.