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Florida Current: Report says lowering property taxes may cause trouble for Florida counties

Wednesday, August 10, 2011

A public policy research group has released a report stating that restricting property taxes may make it harder for Florida counties to deal with the ongoing recession.

According to the latest report by the LeRoy Collins Institute, The Double Whammy Facing Florida’s Counties, recent property tax legislation coupled with the economic downturn particularly related to the housing crisis has counties making up for lost revenue by cutting spending.

From 2008 to 2009, public safety spending was most affected and dropped 40 percent.

In Florida, revenue and spending steadily climbed for 30 years until 2007 when counties began to experience financial instability.

“Over the longterm, counties have been able to weather the mandates that the state has put on them,” said Carol Weissert, Florida State University political science professor and LCI director.

However, the recession along with property tax cuts caused county revenues to fall an average of $60 to $1,226 per capita in 2008, and caused the range in county revenues to widen. In 1976, the range of revenues across counties was between $80 and $704. However in 2009, the range was $633 to $2,988, which shows that the ability to fully fund services for citizens deviates significantly among counties.

According to Wiessert, recent property tax legislation is partly to blame for the lack of county revenue. In 2008, voters approved Amendment 1, which doubled the homestead exemption and put a cap on tax assessment. These measures greatly affected property taxes, which are the most relied upon for revenue in the state of Florida. In 2009, 55 percent of the average county’s revenue was dependent on property taxes.

Wiessert believes legislation on the upcoming 2012 ballot may be even more detrimental toward counties in the future. Amendment 4, which extends a cap on assessments to non-homestead properties and gives a large tax break to first-time home buyers, will cause another drop in property tax revenue which will affect local counties and school districts.

“They probably don’t need anymore fixes from Tallahassee,” she said.

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