Once again, the Florida Legislature is attempting to give a tax reduction by taking it from local government.

In November the voters will be asked to pass a constitutional amendment so that a little more than 10% of those properties being homesteaded can save a few bucks. This is a bate and switch that will raise taxes on business and seasonal residents. The very economic sectors that keep Florida’s economy humming.

It is impossible not to comment on the entire Florida real estate tax system when looking at Amendment 1. While there could be as many as 18 constitutional amendments on the ballot this November, Amendment 1 is a legislative initiative to give a third Homestead Exemption. Like all constitutional initiatives in Florida, it must pass with 60% of the vote.

It is estimated by the Florida League of Cities that, if passed, this amendment would benefit 12% of the homeowners in Florida. It would have no effect on the school taxes levied. School Board taxes in many instances are higher than municipal and/or county taxes paid by a homesteaded homeowner or condo owner. Anyone who has a home with an assessment of under $100,000 would see no benefit. There would be no benefit to any resident paying rent. There would be no benefit to any non-homesteaded property owner. There would be no benefit to business property owners.

It is anticipated that Martin County will see a loss of $6,500,000 in real estate tax collection. The County is already anticipating a millage increase. The passage of this amendment may precipitate a larger increase in the tax rate. One Florida Senator who is in favor of passage said on the Senate floor that localities can just raise the millage to make up the difference.

Since roughly 88% of the properties in Florida will see no benefit, this is a “tax shift” and not a reduction. The Florida Legislature has for the past decade tried to reduce “home rule” authority.  Using artificial property tax cuts, local government’s ability to pay for services become more and more constrained. At the same time the Legislature has increased mandates without adequate state funding.

The property tax system in Florida is broken. As the tax burden has shifted to fewer and fewer property owners through the use of exemptions, caps and other legislative sleights of hand, there has been a disconnect for a substantial number of people between services demanded and the costs of such services. This situation is becoming more and more unsustainable.

Besides being poor tax policy, it is bad social and economic policy. Two identical homes owned by residents that are side by side can have two different tax amounts based on each property’s exemptions and caps. This disparity results in thousands of dollars in tax differential. Economically, by the shifting of the tax burden to tenants, business owners and nonresidents, you inhibit growth and the creation of new business. “Ad valorem” means a tax levied as to the value of the property assessed. This clearly is no longer the case in Florida.

It would be better for property taxes to be left to localities to levy. Further a millage rate should be applied equally to as many taxpayers as possible. An unequal system of taxation has developed because of the subversion of what ad valorem taxes should be.

Amendment 1 is not a tax cut but a tax shift. It should be defeated in November.