Tax cut on one end equals hike on the other
In Palm Beach County, likely savings hailed while loss in revenue feared.
Some see it as a tax cut. Others see it as a tax hike or shift.
That’s how Todd Bonlarron, Palm Beach County’s assistant administrator, spells out Amendment 1 on the November ballot.
Amendment 1, placed on the ballot by the Florida Legislature, would bring another homestead exemption to owners of homesteaded property with an assessed value of
$100,000 to $125,000.
It would deduct up to an additional $25,000 from the taxable value of the home, but doesn’t apply to school taxes.
Experts estimate that countywide — including individual municipalities — the amendment would bring about $67.6 million in savings to eligible residents, or a $67.6 million loss to local governments’ budgets. It just depends on how you look at it.
Those eligible in suburban Palm Beach County would see an average annual savings on their tax bill under the county portion of about $120, Bonlarron said.
That’s the tax cut part. But the county government — which uses those tax dollars to pay for services such as fire rescue and libraries, and programs for mental health and homelessness — could see about $37 million less of that tax money in one year. Of
that $37 million, about $7.5 million would be a loss to fire rescue, and about $1.8 million would be a loss to the libraries.
That could mean cuts in services and programs, or the Palm Beach County Commission raising the tax rate to make up the shortfall, or both, Bonlarron said. The same goes for cities and their individual budgets. That’s the tax hike or tax shift part.
“The reality is, that it’s going to have real impacts to governments around the entire state of Florida,” Bonlarron said at a July workshop with the county commission.
For example, Palm Beach Gardens officials expect to lose about $2 million in taxes each year if the amendment passes. If it does, they plan to gradually reduce the amount of money in their reserves over the next five years to minimize the need for a tax increase. They expect to replenish the reserves as real estate projects get added to the tax rolls.
In order for the amendment to pass, 60 percent of state voters need to choose “yes.” Of the 640,000 suburban Palm Beach County properties, 224,522 are eligible for the additional exemption, Bonlarron said.
State House Speaker Richard Corcoran, R-Land O’ Lakes, has said the exemption “will be one of, if not the largest, tax cut in the history of Florida at $645 million.”
Corcoran has pushed the legislation on his Facebook page, saying: “It shouldn’t be so hard for families to own a home and have their slice of the American Dream. That’s why passing Amendment 1, the property tax cut, is so important Florida homeowners.” He said the amendment would save the eligible homeowners $250 annually.
That post received a mixed response, showing the ongoing debate:
Wrote Bud Foster, “Get real. $250 dollars a year won’t help anyone buy a home.”
Todd Patrick said: “Good, we pay way too much in taxes.”
The CEO of Florida TaxWatch, a statewide public policy advocacy group, called the amendment a “proposed tax shift masquerading as a tax cut.”
“Florida has an inequitable property tax system, and this exemption will make the system even more unbalanced,” said Dominic Calabro, TaxWatch’s CEO.
Another zinger to the county: Officials say if it passes, the amendment will make Palm Beach County a “donor county.”
The Legislature said it would help small counties make up the difference of taxes lost. They could do that by taking from the “statewide pot of money,” Bonlarron said. “Theoretically a lot of our taxpayers are going to be paying sales tax into the state pot that will get shifted to fund fiscally-constrained counties under this.”
Experts estimate that countywide ... the amendment would bring about $67.6 million in savings to eligible residents, or a $67.6 million loss to local governments’ budgets.