John R. Smith on Palm Beach County property taxes
- PROPERTY TAXES
Ideas for reform
By John R. Smith
March 21, 2007
A magnificent opportunity has emerged for thoughtful citizens of our
county to assist in solving the wrenching problem of high property
taxes. The Florida Legislature is in a positive mood to get serious
about reform. Now there's an opening for bright minds in our county
to provide legislators with input for a solution that will make
things right -- not only in Palm Beach County, but all over the
Most of us know the cause of the problem: Increases in home
assessments are capped at 3 percent annually in Florida for
homesteaded residences. But local governments have garnered
increased revenues by the rapid rise in assessments on commercial
property and non-homesteaded second homes. The inequities in the
system have caused businesses and others to bear the brunt of huge
tax increases over the last few years.
Here are some solutions:
--Create a one-time "portability" of the Save Our Homes amendment's
benefits and allow homeowners to carry the 3 percent cap on the
rising assessment and apply it to another home when they move. Why?
Because it is imperative people be able to move without getting hit
with a huge tax increase. Extend the cap and portability to
businesses, vacation homes and rental units.
--Establish a baseline for 2008 taxes using a 2001 rollback rate for
local and county taxes, adjusting for growth of tax expenditures
from 2001 to 2007 figured at the sum of population growth plus
--Limit future millage increases to the combined total of growth
plus inflation, unless there is a supermajority vote of the local
government entity. This would not include school district millage
and voter-approved millage rates. In Palm Beach County, taxes would
drop by an estimated 33 percent.
--Exempt small businesses from tangible personal property taxes if
the property value is less than $25,000.
--Modify Gov. Charlie Crist's proposal to double the current
homestead exemption to $50,000 by taxing the first $25,000 of
property, exempting the next $50,000, and taxing anything above
$75,000. This allows small and rural counties to not lose
significant taxable property off their tax rolls.
--Reduce from eight to two the factors that property appraisers
statewide must consider, using the "current use" standard or
the "income generated" standard (whichever is lowest), not
the "highest and best use" standard.
--Give incentives to local governments to establish "rainy day
funds" over the next five to 10 years: 0.5 percent or 1 percent
should be set aside annually, so that there will be dollars that can
be accessed during economic downturns. But there must be a cap to
prevent large reserves. The interest earned can be used for the
The overall result of these recommendations will significantly lower
property taxes, and place a cap on future tax increases, forcing
local officials to prioritize services and eliminate some of those
John R. Smith is chairman of Palm Beach County's BizPac and owner of
a financial services company.
Copyright © 2007, South Florida Sun-Sentinel