Should Texas Make a Run at Property Tax Reductions?
My good friend Andrew Adler sent me the article below about Florida's attempts at property tax reductions. I couldn't resist offering my thoughts:
Marco Rubio, Republican Speaker of the Florida House of Representatives, thinks he's hit on a way to keep his seat. He's proposing a massive reduction of property taxes that he claims will cut the average Florida homeowner's taxes nearly in half. He proposes that Floridians should decide how much property tax they can afford and then the government should figure out how to stay within the budget the taxpayers allow. Hmm... Interesting concept. I am not an expert in Florida tax law, but I wonder if Florida works anything like Texas. In Texas, property taxes are the mechanism by which the state pays for all public education. Texas does not have a state income tax, so property taxes are typically at the statutory maximums in most urban areas. Urban areas in Texas are under heavy public school financial stresses because of explosive growth, especially in its immigrant communities. Indeed, most urban areas in Texas: Dallas, Houston, San Antonio, Austin, El Paso and the like, have public school systems that are predominately attended by black and brown kids. The white kids have either fled to suburban school districts, which remain largely white, or have opted out of the public school systems and use private schools.
In the interest of full disclosure, I don't like high property taxes any more than the next guy. I have taken issue with my property tax values each and every year. I do so because I want to be sure that I don't pay any more than my neighbors. Heck, I live around some big boys like Tom Hicks, owner of the Dallas Stars and the Texas Rangers, Mark Cuban, owner of the Dallas Mavericks, Larry Lacerte, inventor of TurboTax, Ross Perot, Jr., son of Ross Perot and founder of too many companies for me to keep track of, and I know they pay some big property taxes. I try to make sure that my house isn't valued any higher than their houses. Ha ha, I had you, what I really meant is that I want my house to be reflected on the tax rolls in proportion to my neighbors' values, which always seem lower than the comp sales in the neighborhood. Hey, fair is fair.
If Texas follows Florida's lead, I fear our public school kids will be forgotten once and for all. Indeed, this new Republican proposal in Florida seems awfully close to what a very liberal Democratic New York City tried back in the 1960's and 1970's. Does anyone remember rent control? Yes, this is a stretch, but look for the similarities not the differences. Some New Yorkers still benefit from rent control, but for the most part, landlords can now set rents at market. Marco Rubio wants to set property taxes like the old rent control experiment in New York City, only he gets to call it a Republican tax reduction. The net effect will be the same; the government will be capping values for political expedience. If Marco Rubio has his way, here's the Florida he'll leave to his kids: they won't be able to stay in Florida unless they can afford private schools for his grandkids because the public schools may just completely disappear. Florida will be older, that much is already an established demographic fact, but none wiser. Why? Because most of Florida will be inhabited by retirees and the doctors and nurses who care for them. Florida will become America's old folk’s home. Is that the Florida Marco wants to leave his kids? Perhaps. Or perhaps he's just looking for a nice place to retire. Now I get it, that's exactly what Marco is looking for, property tax control so he can afford his retirement home. How old is that guy anyway?
©2007 Angel Reyes
www.ReyesLaw.com
Marco Rubio, Republican Speaker of the Florida House of Representatives, thinks he's hit on a way to keep his seat. He's proposing a massive reduction of property taxes that he claims will cut the average Florida homeowner's taxes nearly in half. He proposes that Floridians should decide how much property tax they can afford and then the government should figure out how to stay within the budget the taxpayers allow. Hmm... Interesting concept. I am not an expert in Florida tax law, but I wonder if Florida works anything like Texas. In Texas, property taxes are the mechanism by which the state pays for all public education. Texas does not have a state income tax, so property taxes are typically at the statutory maximums in most urban areas. Urban areas in Texas are under heavy public school financial stresses because of explosive growth, especially in its immigrant communities. Indeed, most urban areas in Texas: Dallas, Houston, San Antonio, Austin, El Paso and the like, have public school systems that are predominately attended by black and brown kids. The white kids have either fled to suburban school districts, which remain largely white, or have opted out of the public school systems and use private schools.
In the interest of full disclosure, I don't like high property taxes any more than the next guy. I have taken issue with my property tax values each and every year. I do so because I want to be sure that I don't pay any more than my neighbors. Heck, I live around some big boys like Tom Hicks, owner of the Dallas Stars and the Texas Rangers, Mark Cuban, owner of the Dallas Mavericks, Larry Lacerte, inventor of TurboTax, Ross Perot, Jr., son of Ross Perot and founder of too many companies for me to keep track of, and I know they pay some big property taxes. I try to make sure that my house isn't valued any higher than their houses. Ha ha, I had you, what I really meant is that I want my house to be reflected on the tax rolls in proportion to my neighbors' values, which always seem lower than the comp sales in the neighborhood. Hey, fair is fair.
If Texas follows Florida's lead, I fear our public school kids will be forgotten once and for all. Indeed, this new Republican proposal in Florida seems awfully close to what a very liberal Democratic New York City tried back in the 1960's and 1970's. Does anyone remember rent control? Yes, this is a stretch, but look for the similarities not the differences. Some New Yorkers still benefit from rent control, but for the most part, landlords can now set rents at market. Marco Rubio wants to set property taxes like the old rent control experiment in New York City, only he gets to call it a Republican tax reduction. The net effect will be the same; the government will be capping values for political expedience. If Marco Rubio has his way, here's the Florida he'll leave to his kids: they won't be able to stay in Florida unless they can afford private schools for his grandkids because the public schools may just completely disappear. Florida will be older, that much is already an established demographic fact, but none wiser. Why? Because most of Florida will be inhabited by retirees and the doctors and nurses who care for them. Florida will become America's old folk’s home. Is that the Florida Marco wants to leave his kids? Perhaps. Or perhaps he's just looking for a nice place to retire. Now I get it, that's exactly what Marco is looking for, property tax control so he can afford his retirement home. How old is that guy anyway?
Speaker: Florida House Set to Deliver Property-Owner Protection
Orlando Sentinel
May 11, 2007
Marco Rubio | Special to the Sentinel
When Tallahassee turned its attention to property taxes earlier this year, the focus of the debate for many participants was centered on how much revenue government could afford to lose. Today, as we head toward a special session that promises to deliver historic tax relief, the debate is solely focused on how much taxpayers can afford to pay.
As House Republicans, we consider that newfound taxpayer focus a significant accomplishment.
Over the past three months, the Florida House of Representatives has promoted a bold idea on how to confront our state's biggest problem: unaffordable and unfair property taxes. Our goals were simple: reduce local government taxing and spending, provide significant and immediate relief to taxpayers, and give Floridians statewide the opportunity to vote for meaningful and comprehensive property-tax reform.
We were consistent throughout the debate. Whether our idea or not, we would support any plan that met those three goals and was more focused on the taxpayer than the tax collector.
During the past few weeks, Rep. David Simmons, a Republican from Maitland, suggested an idea that met the House's policy goals, and offered an opportunity for opponents of the House plan to reconsider their objections. The House is now considering a variation of his idea of dramatically increased homestead exemptions based on a percentage of the value of the home. We think this approach is fair and simple, and eliminates many of the inequities that have developed under our current property-tax structure.
Here is an example of how this approach might work:
• On the home's first $300,000 in just value, 80 percent would be exempt from property taxes.
• On the next $700,000 in just value, 70 percent would be exempt.
• On just value above $1,000,000, 30 percent would be exempt.
Under the numbers used in the example above, the new homestead exemption for a $300,000 home would be $240,000. Using the example above, 90 percent of all homestead property owners would benefit more from this proposal than under the current Save Our Homes structure. The average beneficiary of this approach would see his or her tax bill cut in half.
Non-homestead-property owners would also benefit from this approach. Both non-homestead residential properties and commercial/industrial properties would also be exempt on a percentage of their just value and would see property-tax savings.This approach works well because it delivers targeted cuts to those who need it most. Floridians who have been hurt the most by outrageous property-tax increases will see the greatest relief.
Further, by fixing the size of the homestead exemption to the value of property, we will eliminate the problem of many Floridians who are trapped in their current homes by the threat of skyrocketing tax bills if they move to a new home. This would be a great step for our seniors, growing families and first-time home buyers.There are those who believe that taxes should be set by government determining how much government needs and then asking taxpayers to figure out how to pay for it. That kind of antiquated thinking is what got us into this crisis to begin with.
A new consensus is emerging in this debate: First, let's have taxpayers decide what they can afford to pay in property taxes, and then government must do the best it can with what taxpayers can afford to send them. Family budgets are tight, and government needs to start setting realistic priorities with the money it is given, just like our families do every month.
Heading into a special legislative session in June, our goal today is clearer than ever: The next time taxpayers get a property-tax bill, it must be one they can afford to pay. If we can achieve that measure, then I believe Floridians will judge our work a success.
Marco Rubio, a Republican from West Miami, is the speaker of the Florida House of Representatives. He wrote this commentary for the Orlando Sentinel.
©2007 Angel Reyes
www.ReyesLaw.com
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