Tax issues complex, even for the candidates

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Gov. Rick Scott spent the week traveling the state on a “tax-cut bus tour,” touting his record and vowing to slash property taxes even more if re-elected.

But despite his declarations, Scott isn’t certain about the trajectory of the taxes on his Naples residence during his term.

Asked about his own property tax bill at a campaign stop in Bradenton, Scott said, “No, I don’t think my property taxes went up.”

But Collier County tax records show Scott’s taxes not only went up last year, they’ve gone up in each of the last three years. For 2011, Scott was billed $98,435 for the home he bought in 2003 for $11.5 million. That jumped to $101,584 in 2012 and $101,902 last year, and is expected to go up to $102,173 this fall if local governments in Collier County adopt proposed budgets.

That would be a $3,700 increase overall.

His confusion is understandable. In 2011, he forced state water management districts to cut their property tax collections by about 30 percent, leading to about $210 million in savings for property owners — which he noted on his bus tour that included Bradenton and Sarasota this week.

But while that part of Scott’s tax bill has dropped by $1,300 since 2011, the decline was more than offset by rising school taxes and other local government levies.

Scott’s tax bill and his stated perception of it underscores the complexity that candidates face in making property taxes a campaign issue.

Even when state officials successfully cut property taxes, taxpayers in many cases fail to see an obvious benefit — or worse, may see an increase. Even when rates are cut, property owners can wind up paying more because of rising property values. Sometimes, one taxing authority cut rates while another’s rise. And in the case of complex state school funding formulas, property owners in wealthier counties can wind up paying higher tax rates than those in less-well-off areas.

“Florida’s system for property taxes is pretty messed up,” said Kurt Wenner, vice president of tax research for Florida TaxWatch in Tallahassee.

In addition, many homeowners pay their property taxes through escrow accounts with lenders. The accounts include money for property insurance payments, so even when tax bills go down, many owners see their escrow demands increase because of increasing insurance costs; this means any reducations may not be readily felt.

Tax bills can vary dramatically even within neighborhoods, depending on who has a homestead exemption and when they got it. The result is that a property tax cut in one area can reduce some tax bills, while the neighbors’ rise or stay flat because home values were kept artificially low by past property tax cut measures, most notably the Save Our Homes amendment that passed in 1992.

That amendment capped the increase of the assessed value of a home with a homestead exemption at 3 percent per year.

Scott is not the first governor to struggle to make a clear dent on property tax bills.

In 2007, then-Gov. Charlie Crist, who doesn’t own a home and pays no property taxes directly, advocated property tax reforms that became part of a statewide constitutional amendment that passed easily in early 2008. It was to save taxpayers $1.3 billion.

The amendment increased the homestead exemption, saving homeowners an average of $240 on property taxes annually. It also allowed homeowners to transfer their tax benefits to a new residence.

But as the amendment took effect amid the Great Recession, properties declined in value to the tune of $100 billion, according to the Florida Department of Revenue. It is hard even for experts to determine how much taxpayers saved because of the amendment versus the values of their homes, and thus tax bills, declining precipitously.

While property values plummeted that year, some homeowners saw property tax increases because they did not have homestead exemptions or because of the uneven application of the Save Our Homes provision.

Despite those complications, Crist, now running as a Democrat against Scott, touts that tax cut in 2008 as a major victory in his campaign. One of his campaign surrogates responded to Scott’s tax cut bus tour by calling Crist’s measure historic.

Ultimately it is “intrinsically difficult and complicated” to cut local property taxes from Tallahassee, said former state Rep. Keith Fitzgerald, who was on the finance and tax committee during his four-year tenure in the Florida House.

Fitzgerald, a New College of Florida political science professor who supports Crist, said it was not unusual for state lawmakers to tinker with education formulas in an effort to cut taxes, only to wind up raising them.

One example of the unintended consequences was Scott’s proposal in 2013 to give teachers statewide a $2,500 pay hike. Because of the way it was done, 17 school districts — including Sarasota County — had to raise property taxes to make it happen. Legislators who approved the increased school spending blamed the state formula in place for decades designed to make sure school spending is equal statewide.

Coastal school districts with higher property values — including Sarasota — raise most of their money from local property taxes. If the state then increases overall school spending, it can trigger a tax increase in those “property-rich” counties.

Nevertheless, Scott vows to try again if re-elected this year. During his stop in Bradenton, Scott said he would cut taxes by $1 billion. A key piece in the plan is a proposed constitutional amendment he said he will advocate to stop property taxes from increasing when home values drop or remain the same.

“I want to say if your house doesn’t go up in value, your taxes are never going to go up on your property,” Scott said. “We’ll need to do a constitutional amendment on that.”

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Jeremy Wallace

Jeremy Wallace has covered politics for more than 15 years. He can be reached by email or call (941) 361-4966. ""More Wallace" Make sure to "Like" HT Politics on Facebook for all your breaking political news.
Last modified: September 8, 2014
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