Frishe unveils House version of property tax reform plan
By LESTER R. DAILEY
Article published on Thursday, April 19, 2007  |
PINELLAS COUNTY – Reacting to a barrage of complaints from their constituents, Florida lawmakers have decided it’s time to do something about soaring property taxes.
The two houses of the state legislature have different ideas of what should be done. The Senate wants to double the homestead exemption to $50,000, roll back the tax rate on homestead property to 2005-06 levels and make the Save Our Homes tax increase cap portable when a homeowner moves.
But in front of an audience of approximately 70 taxpayers at the Largo Public Library on April 14, Rep. Jim Frishe unveiled an even more ambitious plan being considered by the Florida House of Representatives. Frishe represents much of Largo, southwest Clearwater and the Pinellas beaches.
“If it has sand on it, it’s my district,” he quipped.
But he added that the problem is statewide, not just in his district.
“There’s nobody here that doesn’t understand that we have a problem with property taxes in the state of Florida today,” Frishe said. “If you’re going to live the American dream and own your own home, we’ve got to do something about property taxes.”
The House plan, Frishe said, would eliminate all taxes on homestead properties, and roll back the tax rate on non-homestead properties to 2005-06 levels. To make up for the lost revenue, voters would be asked to raise the statewide sales tax from its current 6 percent to 8.5 percent, the theory being that that would shift part of the burden from homeowners to tourists. The higher sales tax is expected to bring in an additional $6.9 billion a year statewide.
“The cuts that we’re looking to make are going to be across the board,” Frishe said. “Overall, this could be the largest tax cut in Florida history and a major restructuring of how our taxes are collected.”
Coupled with the tax restructuring would be a cap on the amount of revenue local governments could collect and spend. They would only be allowed to increase tax rates to adjust for inflation or population growth or for emergencies if a super-majority of their commissioners approve the increase.
“You spend your money better than we (politicians) do, as a general rule,” Frishe said. “It’s your money; you earned it.”
The reaction of the audience to the House plan was mixed. A financial planner praised the plan, predicting that it will cause an immediate 20 percent jump in the value of homestead real estate and quickly eliminate the glut of unsold houses on the market.
But the owner of a small beach motel complained that the plan puts too much emphasis on homes and doesn’t provide relief to small-business owners. Saying that taxes and insurance consume nearly half her $105,000 annual gross income, she put much of the blame on the practice of taxing commercial properties on their “highest and best use.”
Under that practice a 12-unit motel on land with zoning that would allow a 50-room hotel, for example, would be taxed as if it were a 50-room hotel.
“Highest and best use is the dumbest idea that ever came down the pike,” Anne Garris, head of the Save the Bayfront organization, said in agreement. “Clearwater Beach has been destroyed by highest and best use.”
Frishe agreed that the current tax system has been unfair to the owners of small businesses.
“People who invested in rental real estate instead of stocks and bonds have been penalized terribly,” he said. “We’ve got to do something about that.”
The way to make Florida’s tax system more equitable, he added, is to get away from property taxes whenever possible. If a person’s income declines, he said, the amount of income tax he pays automatically drops accordingly. If a person feels he is paying too much in sales tax, he can curtail his buying. But he has no control over the amount of property tax he pays.
“The property tax may be the most unfair and regressive tax there is,” Frishe said.
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Article published on Thursday, April 19, 2007
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