Florida Amendment 1: Why legislators support it, local governments oppose it

Topping the lengthy list of proposed constitutional amendments voters will decide on Nov. 6 is one that could mean a tax break of about $250 for some homeowners but also could leave local governments scrambling to make up for budget gaps due to the lost revenue.

Amendment 1 would add an extra $25,000 homestead exemption on homes with taxable values above $100,000. Renters and those who own homes with an assessed value under $100,000 wouldn’t see a benefit, opponents of the measure say.

“It’s pitched as a tax cut, but at best it’s a tax shift,” said Joe Pennisi, chairman of the political action committee Floridians for Tax Fairness, which is preparing a campaign to defeat the proposed amendment. “It’s a bad deal for most Floridians.”

But Florida House Speaker Richard Corcoran, who last year shepherded the proposed constitutional amendment through Tallahassee and onto the ballot, said he believes local governments will be able to trim fat from budgets to make up the difference.

“Rightfully, homeowners deserve it,” he said of the additional exemption. “Local governments have a spending problem and that’s the only problem.”

To become Florida law, at least 60 percent of voters will have to give it the green light.

If the measure passes, local governments across the state will pocket less money used to fund services such as police and fire protection as well as run day-to-day operations. The Florida Association of Counties estimates municipalities statewide will lose $752.7 million in the first year, growing to $816.8 mil-

lion after the fifth year.

Already in Florida, homeowners are granted a pair of homestead exemptions — one applied to the first $25,000 of a home’s value and a second exempting the portion of a home’s value between $50,000 and $75,000.

This new exemption would be triggered for the portion of a home’s assessed value between $100,000 and $125,000. The new exemption doesn’t apply to school taxes.

In all, about 320,000 properties across Orange, Osceola, Lake and Seminole counties — about 69 percent — would be eligible for the additional exemption, records show. Seminole has the highest concentration of homesteaded properties with taxable values above $100,000, 78 percent, followed by 69 percent in Orange, 64 percent in Lake and 63 percent in Osceola.

Orlando Mayor Buddy Dyer estimated the city would lose about $3.5 million that flows into the city’s general fund, which is used to pay for police and fire service, he said.

Considering a recent state mandate requiring school resource officers in every school without funding from legislators, Dyer said the amendment creates a further burden for cities and counties to cover.

“The property tax laws themselves now are pretty unbalanced and unfair,” Dyer said. “Some communities potentially will have to raise their millage [tax] rates.”

Winter Park Mayor Steve Leary said the amendment would cost his city about $750,000 annually, which he assumes the city is going to swallow rather than hike the property tax rate.

“It’s going to hurt us,” Leary said. “I would love to give relief to homeowners in any number of ways, but I’m not sure that’s the best way to do it.”

Boosting the tax rate to make up for losses from the extra homestead exemption would be an option for some local governments. But that option could prompt landlords, who don’t receive homestead exemptions on rental properties, to raise rents, and it also could hurt small businesses that would face higher tax bills, Pennisi said.

Leary chalked the amendment up to the Legislature being able to tell voters they cut taxes but putting the onus on local governments to make ends meet.

Floridians for Tax Fairness has a $201,000 war chest to fight the proposed amendment — $200,000 of it donated by the American Federation of State, County and Municipal Employees union in Washington, D.C., according to state Division of Elections records.

But state Rep. Bob Cortes, R-Longwood, said it’s only fair that homeowners get a break. With rising property values bringing in more tax dollars, local governments could have opted to roll back property tax rates to give homeowners a break but chose not to, he said.

“In essence, it would be a correction for homeowners,” Cortes said.

He pointed out that Seminole County is projected to rake in $222 million in property taxes in 2019. In 2020, the first year the new exemption would be applied, the county is projected to collect about $219 million. However, if the amendment fails, the county is slated to collect about $230 million.

“I don’t think it will affect local governments the way they claim it to,” he said.