The following was written in response to a letter to the editor printed in the Sun Sentinel of Palm Beach County, Florida. Let us say that it brought on the frustration of living anywhere near people who can not understand that there is life beyond their own window. The letter was submitted for print to the same Sun Sentinel ... which although they have been kind enough to print my knowledgeable opinion in the past have not decided whether this piece is worthy but that is what blogs are for ... the worthy, the unworthy and what are you talking about.
Mr. Alperstein of Wellington wrote on January 8th, that a vote against the proposed constitution amendment to save his potential portability of his tax basis. His comments bring us all the myths and misconceptions of this issue.
Problem: Property tax reduction for the individual is more important than equitable system of taxation. Mr. Alperstein wants to protect the long time Florida homeowner at that expense of businesses, landlords / renters and snow birds. He wants to continue a system which protects long term homeowners with both a reduced increase in property tax while making his tax burden the responsibility of businesses, landlords / renters and snow birds that are subject to annual rate increases that are two to three times higher.
Misconception: He states “portability should help our real estate market”. Who does Mr. Alperstein thinks was responsible for boosting the real estate market for the last several years? It was snowbirds coming down here, new home buyers and landlords buying property to invest in a good real estate market. It was not the long time homeowner who has sat on the side line watching his home equity increase. So, will long time homeowners move to new home because they will keep their artificially low tax basis?
Myth: Tax reduction is independent of reduction in spending. Governor Crist promised to make our property taxes drop like a rock. Did anyone ask him where either the new money would come from or what expenditures he would reduce to balance this loss in revenue? I think not. Certainly, Mr. Alperstein does not address any concern for this issue. In fact, he writes that local municipalities, police department, fire department, and the teachers are only looking out for themselves. Sir, I am not saying that there might be cost savings to be had with the state and local municipalities, but I kind of think that the personnel of police department, fire department, and the teachers are probably not compensated properly for their services. Add to lack of your concern, the fact that teachers are leaving the state to move to states where they can be properly compensated and can afford the housing. So pretty soon, you taxes will be lowered because we will not have any teachers to provide public education.
Misconception: Portability only costs the homeowner money. Mr. Alperstein, if portability comes into effect, how will Wellington handle it when twenty or thirty or more homes are sold to individuals moving from other communities with $100,000 property tax basis in their home. Under you system of portability, when those homes in Wellington are sold for $500,000 or more Wellington will loose tax basis. In fact if there are twenty homes purchased under this scenario, Wellington would have its tax base lowered by $8,000,000 and if were 100 homes … $40,000,000. How would you like that to affect the services you currently receiving?
Yes, our system is not perfect. All homes are not taxed equally. All taxpayers are not treated equally. The system currently and being proposed rewards the individual who is a resident of Florida and never moves and you want to make it portable perpetuating the discrepancy. The new homeowner pays a higher property tax on a similarly valued home. The non resident bears a higher share of the property tax while using a lower portion of the services. The landlord who helps to provide housing for those who can afford or does not desire the American Dream of home ownership is punished with higher property tax. The young family just starting out with fewer resources is taxed based upon the current fair market value of the home The Florida business considering expanding decides to move out of state because it is punished with higher property tax. The business that likes Florida’s weather but not its unfair business property tax environment decides to set up on a more friendly state … those jobs go elsewhere. But don’t worry Mr. Alperstein, that family who does not move and just watches the value of their home increase while paying property tax based closer to their original purchase price.
So, if you want a fair property tax system, value all real estate based upon its current fair market value. Total the amount of the fair market value in a tax district. Divide the total budget by that total fair market value. No significant difference for the length of ownership or type of ownership. Adjust the fair market value for all real estate every number of years, say three or five years.
Mr. Alperstein please stop worrying about yourself. If you want Florida to be a better place … make the elected officials really improve the education system and make the property tax really fair and equal. So take your blinders off and really look at your state.
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