The following is a brief summary of the upcoming Tax Reform Measures we expect to see on the November Ballot (Be Sure To Vote!). The item I am most interested in is the cap on Commercial Real Estate Value Escalation for Tax Appraisal Purposes. This is going to have interesting consequences in the future. Unless it is a transferable Cap, it will favor the Investor who buys and holds for long periods.


The Florida Tax and Budget Reform Commission met to consider numerous property tax reform measures in the past few days and some interesting results are bubbling up.

The highlight was the passage of CP 002 by McKay and many others. This proposal does NOT include a mandatory services tax.

The proposal now does away with the $9.5 billion Required Local Effort (RLE) that School Boards raise in property taxes at the direction of the Legislature, starting in 2011. It requires the Legislature to fill the "hole" created with an increase of up to 1-cent statewide sales tax (currently at 6%), repeal of sales tax exemptions (primarily on goods), money generated from a recovering economy, budget reductions, and other revenues identified or created by the Legislature.

The commission voted 21-4 in favor of the measure and this will now appear on the November ballot. This proposal has two minor technical stops left before final passage, but significant debate is over.  CP 002 must then be approved by 60 percent of voters.  Commissioner and 2007 FAR President Nancy Riley voted in favor of CP 002.

This proposal will reduce property taxes by an average of 25 percent for ALL property types. Those actual savings will vary depending on which city and county the property is located.  The proposal also includes a 5 percent assessment cap on non-homestead property – a reduction from the 10 percent approved in Amendment 1 this January.

Some concern remains that the Legislature may have to consider taxing services or other tax increases to make up the very large amount of money the RLE represents. There were some business groups that testified today pointing at the uncertainty of what would ultimately be subject to sales tax in the future.

Another proposal considered today was CP 021 by Commissioner Carlos Lacasa that provides, among other things, an eventual 25 percent minimum exemption for all property owners, in addition to the $50K exemption for homestead property. 

Finally, the Commission advanced a statutory recommendation to the Legislature, SP 013 by Commissioner Barney Barnett, that urges passage of legislation changing the presumption of correctness the property appraiser currently enjoys during Value Adjustment Board hearings to “the preponderance of evidence.” 

Be sure to vote in November!