property tax hearing

Taxpayers demand reform

By Palm Beach Business.com Staff

LAKE WORTH — A panel of 15 Florida lawmakers heard three hours of outrage Monday morning from 90-plus Palm Beach residents and businesses fed up with a property tax system charitably described as broken.

During a public hearing held on the Lake Worth campus of Palm Beach Community College, snowbirds, new comers, long-time Florida residents came forward with stories of tax bills that have doubled or tripled over the last few years. Of businesses threatened by a system that taxes them for what they might be instead of what they are. Of inequities and injustices.

Hundreds more sat, listened, applauded and some times cheered as speaker after speaker told stories and demanded reform.

Boynton Beach commercial broker Edward Tedtman put the issue in simple terms: “Taxes are forcing people off the land and I’m outraged.”

"What they're demanding is meaningful tax relief — sooner rather than later," said Rep. Adam Hasner, R-Delray Beach, after Monday’s hearing.

The anger didn’t surprise anyone. Members of the House and Senate finance and tax committees are touring the state, holding a series of nine hearings to get public input on the issue. Lake Worth was the third stop on the tour, which reconvenes in Broward and Miami-Dade counties later this week.

Legislators outlined the tax squeeze this way: Between 1996 and 2006, Floridians’ personal income increased 86 percent to $654 million. At the same time, total Florida property taxes, increased 145 percent to $30.5 billion.

One of the culprits behind the problem is the “Save Our Homes” constitutional amendment voters passed in the mid-1990s intended to shield homeowners from the effects of escalating property values.

While it’s helped long-time owners, it has effectively created a two-tier taxing system where two homes identical in every way, including market value, can have widely different assessments — and tax bills.

It’s also caused local governments to tax commercial property at higher rates to make up for lost revenue.

Lake Worth resident Nadine Battle says the taxes on three rental properties she owns have gone up from $2,000 per unit to $9,000 over two years, making them unaffordable to rent — or sell.

“Now I’ve got rental properties sitting vacant,” Battle said.

Other commercial owners — particularly marina owners — are being hit by a provision of the tax code called “best use,” which allows county property appraisers to value a piece of land not on how it’s presently being used but how it might be used. Marinas, particularly those that serve average boaters, have become an endangered species as taxes on waterfront property skyrockets.

“The working waterfront across the state is in crisis,” said Ray Graziotto, chief operating officer of Seven Kings Holdings, a real estate development company in Jupiter that own marinas.

Graziotto said his company has one property where the taxes in the span of two years have gone from $50,000 to $350,000. That comes to $1,200 per customer per year in taxes alone.

“People can’t afford it,” Graziotto said.

Gaylord A. Woods, a lawyer from Bunnell who specializes in property tax law, likened the state’s tax code to a “structure that has been infiltrated by termites.” The “termites” are tax breaks for large landowners like BellSouth, Florida Power & Light and home builders.

His counsel: repeal the breaks so that everyone pays his or her fair share — “not a penny less, not a farthing more.”

Boynton Beach commercial broker Tedtman wondered whether high taxes favors large landowners by making it ownership unaffordable for smaller interests.

Government spending also came under attack during the hearing.

Everything from new government buildings to new municipal golf courses to empty Palm Tran buses became targets for would-be budget cutters.

“You want to know what happens to your money?” asked Melinda Clark, a West Palm Beach resident. “They’re spending it and they’re spending it like it was water. Americans, you’re being chumped.”

Clark said she and her husband bought and restored a home in Old Northwood as an investment. They’ve put it on the market and can’t find a buyer, she says, because of the high taxes.

But Delray Beach Finance Director Joseph Safford said there’s another side to the argument — municipalities are getting squeezed too, and from both sides.

Higher taxes generate needed revenue for cities, but at the same time, inequities in the system make it more difficult for cities to recruit fire fighters, police officers and other employees who can’t afford to live in the area.

“You have to understand,” said Safford, “cities are same as individuals. We’ve had severe increase in costs. We’ve got openings in the police and fire departments and a lot of other professional groups. If we don’t get employees already from the area weve have problems replacing employees. We didn’t create this problem but there is a problem.”

“We have to pay for government services,” agreed Ted Weiss, a Hypoluxo. “ On the other hand the people who live here can’t afford it. We have to look at what the real cost of government is.”

Some complained that the system overtaxes second homes, driving snowbirds to roost in other warm weather states. Others argued against any relief for part-time residents.

With less than a month before the Legislature begins its regular session, there are no shortages of ideas to fix they system. But there’s also no definite plan at this point either, said Sen. Jeff Atwater, R-North Palm Beach.

“Everything is on the table,” Atwater said.

Proposals range from doubling the $25,000 homestead exemption to eliminating property taxes altogether. Some measures, including one that would do away with “best use” assessments of commercial property, could be done by the Legislature.

Others, such as changing the homestead exemption, would require both legislative action and approval by the voters during a special election later this year or during the 2008 regular election.

But regardless of the method, those attending Monday’s hearing expect legislative help.

“Give us a break,” implored Suzanne Wyman, a Delray Beach and Cape Cod, Mass., resident. “Please save the great state of Florida — for all of us.”

The Property Tax Test

1. Since 2001, how much has Florida’s population increased?

A) 5% B) 12% C)15% D) 25%

2. Since 2001, what was the total increase in overall local taxes levied?

A) 15% B) 33% C) 55% D) 83%

3. Since 2001, what was tht total increase in county taxes?

A) 10% B) 50% C) 65% D) 81%

4. Since 2001, what was the total increase in special district taxes?

A) 27% B) 55% C) 75% D) 107%

5 What fraction of both the House of Representatives and the Senate is required to approve a statewide special election?

A) 3/5 B) 2/3 C) 3/4

6. What fraction of both the House of Representatives and the Senate is required to approve a constitutional amendment?

A) 3/5 B) 2/3 C) 3/4

7. What perctage of votes is needed to pass a constitutional amendment during the 2008 general election?

A)25% B) 50% + 1 C) 60% D) 75%

Answers: 1. B 12% 2. D 83% 3. D 81% 4. D 107% 5. C 3/4 6. B. 2/3 7. C 60%

Source: Florida Senate