Florida’s local governments face new requirements if they want to raise taxes
TALLAHASSEE, Fla. – June 9, 2008 – Contrary to popular opinion, city and county governments cannot easily raise tax rates to make up for any income deficit created by January’s passage of Amendment 1. A local tax increase now requires approval by a super-majority of officials, and it must be called a “tax increase” if considered.
The Florida Association of Realtors® (FAR) lobbied for this change during the 2008 session of the Florida Legislature, considering it an important component of the property tax relief offered by Amendment 1, which voters passed on Jan. 29, 2008. The language is included in SB 1588.
Following discussions during the session, the Florida House added provisions to the amendment that would make it more difficult for local governments to raise taxes either overtly or covertly. However, it was unclear whether the Senate would then sign off on those changes, though senators did reach agreement in the final hours of the session.
A few aspects of Amendment 1 must still be clarified. Once Gov. Crist signs the bill – as he is expected to do – additional rules will be analyzed and created. It’s still unclear, for example, how property tax portability will work in cases of divorce or marriage.
Tax increase changes
Under the old rules, a city or county government could raise tax rates with a simple majority vote. Under the new rules, two-thirds of commissioners must approve the tax increase. In addition, it must be called a “tax increase” so voters understand the issue. In the past, some local governments could use creative wording, perhaps something like a “recapture,” to hide the actual topic.
The average homeowner in Florida should save about $240 on their 2008 tax bill and many local governments are cutting expenses. A few, however, have considered some kind of tax increase to make up the difference. Under SB 1588, though, it will be more difficult.
“This was a big loophole, and people really got angry over it,” says Charlotte Greenbarg, president of a Broward Coalition that represents area homeowner and condo associations. “I have no doubt some cities would have (raised taxes) if they could do it quietly and try to say it’s not a tax increase.”
“The voters believed they did one thing, and there shouldn’t be a crack in the dam to negate their action,” says state Rep. Ellyn Bogdanoff. “It’s not horrible to ask them to get a super-majority.”
Source: South Florida Sun-Sentinel, Scott Wyman, June 5, 2008.
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