The House is set to vote to place a constitutional amendment on the ’18 ballot that would hike the standard homestead exemption to $75,000. The exemption is currently at $50,000. The result of the bill would reduce the typical Florida homeowner’s property taxes bill by several hundred dollars. Though this sounds acceptable on the surface, the ultimate consequence would be an exaggeration of the state’s tax code inequities. The amendment would also decrease funding for services provided by local governments such as police protection, libraries, and parks.
Cutting Property Taxes for the Sake of It
Plenty of Florida lawmakers view the opportunity to cut property taxes as an opportunity for political gain. The constitutional amendment in question is not rooted in logical economics or sound policy. This change would tax a home valued at $100,00 as if it were worth one-quarter of that amount. Though it would save homeowners in Pinellas and Hillsborough around $300 per year, the essential services provided by local governments would be severely lacking. After all, homeowners need law enforcement to keep their streets safe and maintain public parks.
The state of Florida is growing. If anything, the budgets of local governments should expand rather than contract. More people means increased demand for essential services. Tampa would be hit particularly hard as Hillsborough County would lose upwards of $45 million of revenue. Pinellas stands to lose $27 million in revenue. If the amendment passes, living without adequate fire, police, and emergency medical services is a real possibility for Floridians. These public safety services constitute the largest portion of local budgets, meaning they will likely be the first on the chopping block.
An Issue of Fairness
The homestead exemption reduces the tax burden on those who own homes, shifting taxes to those who own apartments, office buildings, commercial spaces and vacation properties. The proposed amendment would exacerbate this already-existing imbalance. Homeowners already reap the benefits of a 3% cap on yearly increases to property taxes. They can even take these savings with them when moving thanks to the portability provision. The bottom line is everyone, including homeowners, should pay their fair share of property taxes for public services.
What Will Happen?
It is likely that this proposed constitutional amendment will pass the House and die in the Senate. At its core, it is nothing more than a means of winning favor with voters in an election year.