City opposes possible tax 'inequities' from Amendment 4
BY MATT MENCARINI | STAFF WRITER
Giving first-time homebuyers tax breaks while raising the tax burden for other homeowners, Amendment 4 will appear on the Nov. 6 elections ballot. A resolution will be presented to the board for approval at a future meeting.
“I think it’s detrimental to the city,” Commissioner Rick Boehm said. “I think it’s an example of the state Legislature passing along to the cities responsibility for providing revenue breaks to citizens, but (they're) not taking responsibility themselves. They put the burden on cities and counties, repeatedly.”
According to the Center on Budget and Policy Priorities, Amendment 4 would raise a large number of Floridians' taxes and cause significant cuts to local services, in addition to putting new businesses at a disadvantage.
“This homestead exemption could be worth half, or almost all, the value of a home, literally, allowing someone from another state to buy a home and not pay city taxes in this state,” Boehm said. “And that’s wrong, as far as I’m concerned.”
Property taxes for current residents would increase in order to make up for the lost revenue from the exemptions presented to new residents.
For those local governments that don’t raise property taxes, service cuts would need to account for the lost revenue.
The real estate industry is among those pushing the cause for Amendment 4, in hopes that it will stimulate the real estate and housing markets, positively impacting the state.
Florida TaxWatch, in a June study, estimated that Amendment 4 would result in 19,483 new “private, non-farm jobs” being created between 2013 and 2022.
The group also said the Florida gross domestic product would increase an estimated $1.1 billion, and personal income would increase by more than $5.3 billion, over those same 10 years.
Mayor Ed Kelley said that, potentially, someone who lives out of state and owns a home in Florida could re-deed the home to themselves and qualify for homestead exemptions.
“That’s another thing that concerns me with what (the state legislature) is trying to do,” he said. “At some point in time, the state is going to have to look and stop trying to piecemeal our tax code and take a real hard look and do something that’s fair for everybody.”
On Sept. 24, the Volusia Council of Governments unanimously passed a resolution opposing Amendment 4, saying it “created additional inequities in Florida’s tax system by granting certain tax breaks to some taxpayers at the expense of other taxpayers.”
The resolution also project the total tax impact of the amendment to be $1.6 billion over four years, beginning in 2013, with $447 million being absorbed by cities.
According to the county: the amendment would instate tax laws that reduce the annual assessment increases on non-homestead property from 10% to 5%, give an additional homestead exemption to first-time homebuyers and give the legislature the power to eliminate the recapture rule, which allows a property’s assessed value to rise even if its market value declines.