Florida Property Tax Policy--Rewarding Local Government Coffers in Up AND Down Housing Markets

A recent article in Time Magazine illustrated the dysfunctionality of Florida's property tax system. from the article:

“Welcome to Florida, the land of no income taxes — and killer property taxes. Whether it's a nightmare for someone who just purchased a Florida foreclosure or a tax hike that proves the last straw for some struggling homeowner, it's bad news for the individual, and increasingly for the state. It's also a painful reminder of the halcyon days when Florida's economy could lazily rely on soaring real estate prices — and related taxes — to pour ever more money into government coffers. Now local governments say they're broke, thanks to the housing bust, and many are trying to maintain the lofty property-tax rates levied during the housing boom or even increase them — even though that could exacerbate the housing bust….because of arcane provisions in the homestead law, government appraisers can tell a homeowner that although his house's current market value may be as depressed as a Florida sinkhole, its taxable value is still high or rising. More important, many of the state's county and local governments are raising their millage rate (the rate per $1,000 of assessed value that determines the property-tax bill) to make up for budget shortfalls.”

I know, I know, we're told that raising the millage rate is not a tax increase, (tell that to a new Escambia County homeowner or new commercial property purchaser or someone who's assessed value remained flat over last year) but I still believe it is disingenuous to raise a taxation rate and not call that an increase. I'm sorry, I just don't buy that.

My opinion is that local government coffers (all levels, even school districts) need to be responsible in growing their budgets during booms--but they also owe it to taxpayers to decrease their budgets during "once in a lifetime severity" type recessions. Most normal households, small businesses, and taxpayers have to suck it up when the economy turns bad. When times are tough, everything gets cut, cut, cut. Local governments should be no different! The idea that raising tax rates such that a government's locally raised budget remains at the same level as a previous year's level--even during historic financial turmoil-- is irrational; and no matter what TRIM law verbage or other explanation one uses--increasing a tax rate is a tax increase. Doing it amid the backdrop of 11% unemployment, record foreclosure rates and bankruptcy filings is unconscionable.