Originally Posted By magnet Well, if anyone's been following local Florida politics it's painfully clear by now that Crist's property tax amendment has passed. Nevermind the fact that the state has no plan on how to fund essential government services like fire, police, parks, and not to mention the public school system here, which is one of the most poorly funded in the US. Thank God for Mississippi, which saves us from being dead last. Florida has no state income tax. If things are going to change for the better, it looks like our only option is to now start taxing incomes. Florida has grown to the point where the economy can no longer be sustained by a sales tax on purchases made by tourists. When economic times take a downturn, and the tourists leave, our state withers on the vine. Unfortunately, given last night's tax decision, things are going to get worse before they get better.
Originally Posted By wahooskipper Most of us who were opponents of the measure really thought there was no way it would garner 60% of the vote. It got over 70%. That really shows how popular Governor Crist is right now (as does that fact that McCain won the primary...with Crist's endorsement). It makes me wonder if Crist is going to finish out his term or if he has higher aspirations. In any event, as a municipal employee I am discourage but as a homeowner I am encouraged. I think portability (which may be challenged in court and could likely result in the loss of Save Our Homes) will to jumpstart the dire housing market. But, residents in Florida better brace themselves for less services or higher user fees. It wasn't a "cry wolf" scenario at all. There will be cuts and they will be felt. If that is the way the residents wanted it then they won't be complaining. But, the fact of the matter is, I really don't think the typical Florida has any idea what is about to transpire on the local level. Buckle your seatbelts.
Originally Posted By wahooskipper To explain it might take all day, an economics professor, and a tarot card reader but...I'll try to summarize. Here in Florida we have something called Save Our Homes which is a $25,000 reduction of our Assessed Value of our homes when it comes to tax time. If my home is worth $100,000 I pay taxes on $75K with SOH. The first thing this amendment does is double that exemption. Result: Loss of revenue to local taxing entities. Second, they have introduced "portability" to Save Our Homes which means if I sell my house and buy one in another community, I can take the value of my SOH and apply it to the new house. Result: reduction in revenue to local taxing entities. The inherent problem with the Save Our Homes measure is this: I bought my house in 1998. The value then was roughly $100,000. So my tax rate is based at $75K. The value of my home now is around $300,000 plus (as is the value of all of the other homes on the street). But, when my new neighbor bought his $300,000 home his tax rate is based on the entire $300K. After the first year he can apply for the SOH savings but even then it will only knock the taxable value of his home down to $250K while mine is still at $75K. We have identical homes receiving identical services and my tax bill is around $1,000 and my neighbor's tax bill is over $3,000. This amendment did not even address the unfairness of that...which is the overriding complaint down here. Finally, the State of Florida continually passes unfunded mandadtes (such as a class size amendment requiring schools to have no more than X children per classroom). So, in this case schools have to build more classrooms, hire more teachers, etc but their budgets are now being reduced....BIG TIME. It all adds up to a complete collapse of the system. What they should have done...and should still try to do in my opinion...is abolish the property tax system as we know it and either significantly increase the sales tax or start from scratch. And, the real kicker is that there is a great liklihood that the "portability" measure will be taken to court for it's Constitutionality and many experts believe it will be found Unconstitutional...and in additon the SOH itself might get tossed as well. Suddenly...everyone's taxes go up. You add that in with the Insurance quagmire we are in right now (most homeinsurers are dropping Floridians b/c of the hurricanes...putting them in a state sponsored insurance program...never a good thing) and those who are able to hang on to their private carriers are paying astronomical rates. So, the average worker (teachers, police, fire, retail, etc) can barely afford to pay the mortgage, taxes and insurance...let alone try to put any money into savings. Inflation has grown higher than anywhere else in the country down here in SE Florida and foreclosures are at an all time high. While I appreciate that the Federal government wants to send me $600...it won't avoid the catastrophe that is about to become of Florida.
Originally Posted By Mr X **To explain it might take all day, an economics professor, and a tarot card reader but...I'll try to summarize.** lol, ain't that always the way. Thanks for the info. **We have identical homes receiving identical services and my tax bill is around $1,000 and my neighbor's tax bill is over $3,000. This amendment did not even address the unfairness of that...which is the overriding complaint down here.** It isn't as unfair as it may seem on the surface of it. What it comes down to is, you shouldn't have to pay taxes on unrealized capital gains. In other words, if there's a bubble and your home value jumps 50%, you have to pay more taxes and then, say the bubble bursts and your value plummets 60% and you sell...at that point you have paid taxes on gains you NEVER realized, and why should you? Not only that, in the end you took a loss (do you get a tax refund then? lol). Another way to look at it is, do you pay taxes on unrealized capital gains when you buy stock?
Originally Posted By jonvn Sounds like a good law to me. California does something similar. It was called prop 13. Your property taxes are based on the purchase price of your home. It's 1% of that. Previously, your taxes were based on the assessed value of your home. So your taxes constantly went up year after year. People finally got sick of it, and passed a draconian law that stopped it. Somehow the state has survived.
Originally Posted By Mr X It does make sense. When you buy your property, you know exactly what you're "getting into", as far as valuation and the relative tax situation... After that, it's pretty much out of your control. How fair is it to tax you for something you have no control over (property prices...particularly in a bubble situation). Put it this way...you buy a house for 100,000 dollars. Fine and good, you bought it and are willing to pay the taxes for such a property. THEN, oil is stuck under and around your property. Suddenly your property (house) is worth 100,000,000 dollars (yes, a hundred million). BUT, you're not drilling for oil, you just live there. Should you suddenly be responsible for a hundred fold increase in tax? If so, WHY? You don't drill for the oil, you just live there. And THEN imagine (continuing the hypothetical) that the "oil craze" goes bust. So your property is worth LESS than you paid for it. Is it okay that you paid A THOUSAND TIMES more taxes than the place was worth, both at purchase and at sale, in taxes?
Originally Posted By friendofdd I'm grateful for prop 13 here in California. My fixed income couldn't handle taxes based on assessed value since that has more than doubled since I bought in 2000. Sounds as though the retirees who have settled in Florida are making their voices heard in this matter. I don't understand the portability aspect though. If one can handle a purchase of X dollars, one should also be prepared to pay taxes at that value.
Originally Posted By Kar2oonMan Exactly. The reason Prop. 13 in California was put in place is because people who had purchased homes in the 1950's for $15,000 suddenly found the value had exploded in the 70's to $100,000. They were still living in the home, not making money off this increased value. Yet, they were being taxed into the poorhouse as if the increased market price was instantly income. There were cuts in all kinds of services after Prop. 13 passed. However, as Jon said, the state lived.
Originally Posted By fkurucz <<California does something similar. It was called prop 13. Your property taxes are based on the purchase price of your home. It's 1% of that.>> We have TABOR in Colorado. Rather than cap tax collections, it caps gov't spending. Spending increases are indexed to inflation and population growth. One thing that a lot of cities and counties do is exempt sales tax collections from TABOR, especially if they are either tourist zones or shopping hubs. Loveland attracts a lot of weekend shoppers from Wyoming and even Nebraska.
Originally Posted By fkurucz <<There were cuts in all kinds of services after Prop. 13 passed. However, as Jon said, the state lived.>> They increased other taxes to compensate.
Originally Posted By RoadTrip Your house's assessed value for taxes doesn't go up as your market value goes up?? That's crazy. Republicans... who can figure them?
Originally Posted By imadisneygal If you refinance then your taxes are reassessed, but not if you don't refinance....
Originally Posted By RoadTrip Wow. Our assessed value is adjusted every year based upon market averages in the area. Once every 5 years a tax assessor tours our home to assure that it is being assessed accurately. We also have a property tax credit so people with low incomes do not have a difficult time staying in their home because of increasing value. When the cost of everything taxes pay for goes up I really don't see how assessed values can remain the same. Does the percentage of value that you pay in taxes go up to increase revenue? Minnesota is a "high tax" state, but like everything else you get what you pay for. Minnesota is consistently ranked as one of the top states in the nation when it comes to education, health care, social services, public recreation facilities, the arts, etc. I know some people think low taxes beat anything, but I like living in a state that has a high quality of life.
Originally Posted By jonvn "Our assessed value is adjusted every year based upon market averages in the area." Yeah, well, that stinks. How they did it here was "This year your house is worth X, so we will tax it on that rate." And houses in CA go up a lot in value quickly. You never knew from year to year what your taxes were going to be. "Does the percentage of value that you pay in taxes go up to increase revenue" No. It's 1% or so. It can go up a tiny tiny amount to adjust for inflation, but that's about it. "I like living in a state that has a high quality of life" People were on the verge of losing their homes because of the situation. The government simply was not doing anything about it, and so the people voted in this law. Eventually, as people move in and out of their houses, the taxes go up that way as that is when they are reassessed to the selling price of the house.
Originally Posted By Kar2oonMan >>Your house's assessed value for taxes doesn't go up as your market value goes up?<< No. >>Wow. Our assessed value is adjusted every year based upon market averages in the area.<< That is how it was here prior to Prop 13 back in 1978. What happened is that the property taxes were slamming people who had paid off their homes purchased many years before the market exploded. (By the way, Howard Jarvis, the father of Proposition 13, can be seen in the movie "Airplane". He's the passenger in Ted Striker's cab, waiting for him to return throughout the movie.)
Originally Posted By RoadTrip <<People were on the verge of losing their homes because of the situation.>> That is what our property tax credit is all about. Those people whose property tax is high relative to their income receive a credit. I really think that is the fairest method. Those who can afford to pay taxes on their homes increasing value do so. Those who cannot have the tax reduced. We also have a ‘circuit breaker’ that provides property tax refunds up to $1,000 to owners who’s home’s assessed value has increased more than 12% from the previous year.
Originally Posted By jonvn I think the situation in Minnesota is not quite the same as it is here. People's taxes would go up by thousands of dollars per year. It was impossible to deal with. For example, my father bought a home in the San Fernando valley for $25,000. He eventually sold it for $185,000. Not only did the house get constantly reassesed, but the tax RATE also would go up all the time too. So, his taxes probably would have gone up 10 to 15 times higher than what it was when he bought the home. This is not over 30 years, this is like over 5. When Prop 13 came to pass, his taxes dropped down, he could afford to stay in his house. Otherwise, he would not have.
Originally Posted By RoadTrip What can I say? Despite its cold weather (currently -1 degree) I think Minnesota is without a doubt the absolute best state in the nation.
