The bewildering road to property-tax reform
By GREGG FIELDS
Published June 11, 2007
As the Florida Legislature filed into Tallahassee last winter, the state's leaders said fixing the property tax mess in our state was their top priority.
Presumably, that meant a clear proposal would be promptly enacted during the general session.
That presumption would have been wrong. Actually, property taxes were such a priority that the approach was to present bewilderingly contradictory ideas in great abundance, then adjourn without voting on any of them.
Talk about much ado about nothing (thank you, Shakespeare). Perhaps the Legislature should have broadened its agenda, setting new priorities like establishing world peace, curing cancer or resolving whether the chicken came before the egg. Then, when they failed to act, at least they could fall back on the excuse that no one yet has been able to solve such monumental issues.
WHO PAYS WHAT NOW?
With the Legislature reconvening on the property tax problem, there is new hope that a solution will be found. Just last weekend, there was even an agreement announced. The details were sketchy, but apparently you'd pay so much on a certain share of your home's value, a different amount on any value above that, followed by an even higher amount above thresholds like $1 million or so.
Unless you like the current system. Then you can keep it. And, incidentally, any changes by the Legislature must be approved by voters.
On behalf of Florida voters, may I just say: Thank you for clearing that up. Perhaps Florida license plates should bear the adage: ``The State of Confusion.''
First, the idea of an election is unsettling. It was the ballot initiative of Save Our Homes that started this mess. Furthermore, everyone knows how well ballotcounting goes in our state. Rather than roll back taxes, we'll probably be told we just elected George W. to a third term.
While it's easy to be bewitched, bothered and bewildered by the legislative follies (thank you, Ella), our leaders deserve credit for noting something important. To wit: What the heck are local governments doing with all this money?
As real estate boomed, property tax collections flooded into municipal coffers. I'd love to say that resulted in all urban ills being quickly dispatched. It didn't turn out that way. In my own community, for instance, locating an urban ill pretty much requires little more than throwing a rock. You'll be sure to hit one.
HARD TIMES UP NORTH
Still, I love the City of Miami and wouldn't live anywhere else. Harsh winters up North rule out -- well, Broward. And no one goes to Miami's southern suburbs anymore; they're too crowded. (Thank you, Yogi.)
Nevertheless, the city's audited statement does provide some insight into how much things have changed. I gleaned that property tax collections rose 62.5 percent from fiscal 2002 through fiscal 2006. That's a big chunk of change, with total collections now coming in at roughly a quarter of a billion dollars -- $246.47 million -- as opposed to $151.61 million in 2002.
Accompanying the building boom was a surge in other revenue, like construction impact fees. Indeed, total revenue for the City of Miami has increased 35 percent during this same period, from $519.62 million to $703.61 million.
So while the city's annual report notes, correctly, that Miami has reduced the millage rate of property taxes, it's clear they're still ahead.
For instance, did the City of Miami need to keep property tax collections rising so quickly because overall inflation was making it tough to pay other bills? Definitely not.
The Consumer Price Index went up 12 percent from 2002 to 2006, according to government statistics. Miami's property taxes rose five times faster.
Of course, the city has gotten larger. Between 2000 and 2005, the population went from 362,470 to 386,147, says the Census Bureau.
That's a gain of about 1.3 percent annually. But property taxes rose more -- up by 16 percent in both fiscal 2005 and fiscal 2006, for instance.
Spending, fortunately, was up to the challenge. Total expenses for the City of Miami rose 33 percent between 2002 and 2006, roughly equal to the higher revenue.
This has some elected representatives complaining of bloated local bureaucracies, but the City of Miami's payroll is up 27 percent in the last five years. That's less than overall revenue growth, and undoubtedly annual raises account for much of the increase.
With property taxes now such an important component of local government, one has to wonder whether we can really roll them back to the way we were. As a natural optimist, I hold out hope that tax reform remains possible.
But I was intrigued by a comment from House Speaker Marco Rubio last week. ``We don't want to put things out there that we would either have to retreat from or admit we were wrong about, because it just confuses people even worse than they are right now.''
Thank you, Mr. Speaker. But that's not possible.