“In terms of total value, the Broward County tax roll increased by over $14.1 billion (in 2004) -- the largest dollar increase ever in Broward history.”
So said Broward County Property Appraiser Lori Parrish on June 1st.
She also stated that “With this rate of growth, the various taxing authorities have an opportunity to cut millage rates while still generating more than enough money to provide for services."
What are the odds that the Broward County Commission and most of our other local agencies will heed her advice to notably cut tax rates instead of using that growth to fund ever increasing government expenditures? Don’t count on it.
Fortunately for those of you living in the Town of Davie, your Town Council is comprised of a number of fiscal conservatives who share my belief in limiting government growth to fund necessities and not luxuries.
Property taxes have become a major topic around the country and in our local neighborhoods. Have property taxes gotten out of hand? Your answer will depend on whether you are one of the “haves” or “have nots”.
If you “have” owned your home since the 1990’s, you are benefiting from the 1992 Save Our Homes Amendment which limits the increase in your home value to about 3% per year.
If, however, you purchased your home in the past few years when housing prices started to explode here in South Florida, then you are a “have not” and are paying far more in property taxes than many of your neighbors. See for yourself by checking out the Broward County Property Appraiser’s website.
Perhaps if the Save Our Homes amendment had not been passed, all property owners would be paying similar taxes and those “have nots” would not be paying a disproportionate share of property taxes for the same government services.
More importantly, are potential “have nots” being scared away from buying a new or resale home by high property taxes? And are the “haves” afraid to give up their low taxes by moving?
Before you get ready to tar and feather me for suggesting that the Save Our Home Amendment be revised to more fairly value all homes in our county and state, I don’t propose doing so. People should not be taxed on the potential resale value of their home since that would hurt our neighbors on fixed incomes or those already financially stretched by other costs of living in our society today.
Perhaps the solution is to start the taxable value of all new or home resales at the average existing assessed value of similar homes in that particular neighborhood. Of course doing so would notably decrease property tax collections which fund our local governments. Would that be so bad?
Before you start laughing all the way to the bank, let’s agree that local governments have to replace those diminished tax receipts. The most likely solution would be to capture some of those lost taxes when the home is sold.
In essence, instead of the “have nots” paying ridiculously high property taxes throughout their period of home ownership, they should pay something similar to a capital gains tax on the difference between the market value of their home when sold against my recommended neighborhood average assessed value when they bought it.
What about the “haves”? Since they too have benefited from property taxes based on assessments well below current market values, they too should pay the gains tax.
What rate should that capital gains tax be? I’ll let the economists and actuarials calculate and propose that number for voter approval. But it must be ultimately revenue neutral and not provide revenue that would allow government to grow beyond its current needs. And I would want such tax legislation to require voter approval for that agreed upon rate to ever be increased.
Does proposing such a capital gains tax end my rein as a fiscal conservative? Or does my suggestion make me a hero by actually increasing home resales, and maximizing the affordability of buying a home, by eliminating the sticker shock of high property taxes in exchange for a small fractional profit tax similar to that paid for other investments? I welcome your thoughts in care of this magazine.
Friday, July 01, 2005
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