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John R. Smith on Palm Beach County property taxes

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  • Philip Blumel
    PROPERTY TAXES Ideas for reform By John R. Smith Sun-Sentinel op-ed March 21, 2007 A magnificent opportunity has emerged for thoughtful citizens of our county
    Message 1 of 1 , Mar 22, 2007
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      PROPERTY TAXES
      Ideas for reform
      By John R. Smith
      Sun-Sentinel op-ed
      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
      state.

      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
      inflation.

      --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
      current budget.

      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
      considered non-essential.

      John R. Smith is chairman of Palm Beach County's BizPac and owner of
      a financial services company.

      Copyright © 2007, South Florida Sun-Sentinel
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