Promises, promises...
...and what do we get? Not much.
Tallahassee -- Rubio and Crist -- is warning that we may not get as much of a tax cut as expected. I'm not surprised. Reducing taxes will mean a reduction in services, and few politicians have the stomach for that.
Think of your family budget and then make it millions of times bigger. If your income is reduced in some way, your purchasing power will also be affected. Same holds true in a macroeconomic way.
This tax debate reminds me of the insurance reform a session or two ago. When I got my State Farm homeowners' bill, I was surprised by how little "reform" had affected it.
Tallahassee -- Rubio and Crist -- is warning that we may not get as much of a tax cut as expected. I'm not surprised. Reducing taxes will mean a reduction in services, and few politicians have the stomach for that.
Think of your family budget and then make it millions of times bigger. If your income is reduced in some way, your purchasing power will also be affected. Same holds true in a macroeconomic way.
This tax debate reminds me of the insurance reform a session or two ago. When I got my State Farm homeowners' bill, I was surprised by how little "reform" had affected it.
posted by Ana Veciana-Suarez at 9:45 AM
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Correct me if wrong, but I seem to have read that 90% Dade County's fire dep's budget comes from property taxes. How do other fire deps handle their budgets?
They are claiming that we have the 3rd largest in the country, for what? Perhaps this is where some of the school funding money is going.
Can someone over there please say that now is the time that this state needs an income tax. Thank you.
"Services will be cut" is a pretty broad statement meant to scare everybody away from asking for tax cuts. The implication is that we are already as efficient as we can be an any cuts would be to necessary services. I have a hard time believing that any department in the State or county could not cut 5-10% without breaking a sweat.
The unfortunate fact is that governments don't face any competition and are not allowed to go out of business. So they just grow and grow without the need to account for waste or make dramatic changes to deliver services efficiently.
Then with property values going up so dramatically in the past 7 years, taxerevenues have gone up as each home turns over in a sale or other title transfer.
If the taxes are not resolved the revenues will continue to dry up.
For Example: Imagine a street of 100 homes all purchased 25 years ago each with an assessed value of 100,000 and a market value of 500,000. The total taxable base for this street is $10,000,000 (100 times 100,000). At a .22 millage rate that street creates $220,000 worth of taxes.
If the Tax Situation is not fixed soon and people just stop moving then we will still be facing dramatic cuts in tax revenues (assuming Homestead Protection)
Normally, Americans move once every 7 years. So each year if 1/7th of all the houses sell the taxable base of each house rises to 85% of the sale price. If in Year +1 14 houses sell then the taxable base is 14,550,000 (45% tax revenue increase). But if in year +1 only 7 houses sell the taxable base increases to only 12,275,000 (22%). But if in Year +1 only 1 house turns over then tax base will only be 10,325,000 (3.25%). So if houses do not turn over because people can't afford 500% increases in property taxes then revenues still dry up.
While it looks dire into the future this is the kind of revenue increases the State has been getting for the last few years. However, they have been spending it.
The voters do need to send a loud message to legislators to fix this situation, it will end badly either way. The problem is that have had more money by doing nothing as a result of the insane increases in property values. It is time to resolve the out of balance tax structure before it ends up destroying the economy first.
It is not just a matter of 5-10% cuts which then the bureaucrats apply to the most painful, public facing services to be able to say "We told you so" and we don't ask for any more cuts.
Suprise Suprise!!!!
An across-the-board, one-cent sales tax increase will go a long way toward making, the first phase of Rubio's original proposal workable. And, that's what we need to push for! "One-cent sales tax increase, property valuation rollback to 2003 levels for all properties and a 45% reduction for homesteaders. If people are protected by Save Our homes, they naturally won't gain as much. But, they had more than new buyers to begin with! This measure would be fair. It would maximize tourist revenue. And, it would gain participation from undocumented workers who are enjoying our public infrastructure and facilities. Is it regressive? Perhaps. But, it's based on consumption, not property appreciation. I think it's a good trade-off.
What are our legislators thinking? How in God's name are the local governments supposed to estimate their budgets for the coming years when they will have NO idea how many homeowners will take advantage of the "Super Tax Cut"?
This just doesn't make sense. This just reminds me of the time when the Lottery was started and our wonderful governor (at the time), Bob Martinez, "estimated" how much the Lottery would bring in revenue and supplanted the education budget by that amount.
He screwed up and education funding was affected for YEARS because all of a sudden, "surprise, surprise", we don't have as much money as we anticipated.
Can anyone imagine setting your home budget on an amount that you have no idea will be in the future?
The republicans are quick to say, "OK, we will ensure that education will still be funded". Florida is at the bottom of the ladder in education spending. Schools are already strapped at the local level.
And where will the funding be made up for other services such as fire/rescue and police protection?
The bottom line is that the money will have to be made up somewhere.
Go back to the example of your home budget - let's say that one person in a couple loses a job... your budget has just been cut. If you cannot afford to cut your spending to just be able to live, then you're going to have to find another means of replacing that lost income.
I certainly hope that this bill bombs at the voter level. What do we truly want: a quick fix that gives us cash in our hands right now, and then makes no promises for tax increases in the future?
Remember the story of the ant and the grasshopper?
It seems as though our legislators are not very creative.
I am in Miami-Dade County and as we all know the main indurstries here are Tourism and Real Estate.
We all depend on this two in one way or another.
The plan has to give a brake to all people if this goverment is for the people by this I mean Owner Occupant, Investment and Commercial properties a like.
We need something more drastic.
So that the snow birds will start investing here again and not selling and leaving like must of the people from this Great State (or was it) that you talk to want to do.
Also lets not forget the insurance issue that still very much a problem.
Please Mr. Crist don't let them fool the people of the State of Florida.
I too believe in the same theory,"Where there is cut in the taxes,there will be cut in the service too"..But our expectations is use the tax in the profitable way for the society and the tax payers...
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What I don't understand is all this crying from the counties stating that there will be a "blood bath" if the cuts are instituted. It is also said that MOST of our property taxes goes to schools, cops, and fire fighters. The fact is that the counties (particularly miami-dade) has DOUBLED the amount of tax revenue. Where has that money gone? If the money MOSTLY gone to schools, cops, and fire fighters, then I have the following questions and I WANT ANSWERS: 1) Has the number of schools or children DOUBLED? 2) Have teacher wages DOUBLED? 3) Has the police force DOUBLED in size? Have their wages also DOUBLED? 4) Has the fire fighting force DOUBLED? What about their salaries???
You see, it makes no sense all this CRYING about cutting. I dont see a doubling or tripling of any of these "critical" services - however if you look at OTHER departments mentioned in other news, like the PERMITTING department which tripled its staff to handle all the building boom - and what about the Property Tax Assessment office which I also read DOUBLED or TRIPLED their staff to stay on top of property assessments - YES THOSE ARE THE ONES THAT HAVE TO PAY THE PRICE AND REDUCE!!
One final blow to this "crying" from the counties - How did you manage 5 years ago before property values adn taxes DOUBLED? Yo managed more or less fine back then, and now that your coffers are full of waste, you cry that you must cut schools, cops, and firemen. Shameful.
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