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Hernando Today

Crist Tax Proposals Questioned

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By MICHAEL D. BATES

Hernando Today

Published: February 19, 2009

Gov. Charlie Crist sent up a trial balloon this week to see if a proposed property tax reform package will either fly or get deflated.

The Florida Association of Counties hurried a news release seeking to puncture the whole idea. Local government officials are waiting for more information but have already questioned the administrative quagmire it may create.

Crist's plan, still being fleshed out before it's formally presented, has four separate proposals, which were first reported by the Times-Herald in Tallahassee:

• Cap government spending by limiting cities' and counties' tax collections.

• Limit growth in the assessed value of businesses, vacation homes and other non-homesteaded properties to 5 percent annually.

• Aid first-time homebuyers by increasing the homestead exemption to 50 percent of the home's market value.

• Prohibit tax-assessment increases on homesteaded properties whose market values decline.

Hernando County Property Appraiser Alvin Mazourek said he wonders how many first-time homebuyers would benefit from the 50-percent rule.

"If you're talking about a house that has a $1,000 tax bill on it, will 50 percent (make a difference)?" Mazourek asked. "That's $500 a year."

When other costs are added on - utility bills, insurance, mortgage payments, repair bills - it is questionable as to how much it would help, he said.

Mazourek said the administration of these proposals could also be a problem. For example, if the county had to track the 53,000 or so people who have homestead exemptions and see if their market values decline, it would require stepped up tracking to make sure "everyone is getting what they're entitled to," he said.

'Tax Patch'

In a statement issued Tuesday, The Florida Association of Counties (FAC) said Crist's proposals amount to a "property tax patch" and "would be detrimental to already struggling local economies."

"It is our counties, not big government, which should be choosing the look and feel of our communities from critical services to quality of life," the FAC said.

"While a revenue cap on local governments may sound good, it is unrealistic and it defies common sense," the FAC said. "If there is a cap, how will local governments address rising expenses such as gas, security, technology and health care?"

To "tie one hand behind the back of local governments would cripple our communities" and stall economic recovery, the report said.

The passage of Amendment 1, which doubled the homestead exemption from $25,000 to $50,000 for qualifying homeowners, caused Hernando and other counties to further tighten their fiscal belts.

To impose more cuts may cripple the local economy further, FAC said.

"While some reductions have increased efficiencies, an artificial, one-size-fits-all gimmick will prohibit counties from being able to provide critical services that are in higher demand due to Florida's struggling economy," FAC said.

A $6 Million Hit

Budget Director George Zoettlein said he had not read Crist's proposal and couldn't comment on specifics. However, he did have statistics as to the current financial picture of the county.

Zoettlein said Hernando County lost some $6 million in tax revenue from 2008 to 2009 due to Amendment 1, falling property values and the institution of the Save-Our-Seniors Tax Exemption program.

In fiscal year 2007-08 - before Amendment 1 was passed - the county took in about $62 million in general fund tax money. This year, for fiscal year 2008-09, Zoettlein estimates the county will take in $56 million.

Zoettlein said he will take Mazourek's preliminary numbers on property values, which will probably be released in June, to calculate tax revenue for fiscal year 2009-10.

As a hypothetical example, if property values decline about 10 percent - using the $56 million figure - that would be another $5.6 million in lost tax revenue, he said.

The loss could be higher when factoring in the decrease in sales tax revenue and revenue sharing, he said.

Reporter Michael D. Bates can be reached at 352-544-5290 or mbates@hernandotoday.com.

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