Florida Tax Reform: Lawmakers considering potential study on eliminating property taxes

A proposal to begin the process of removing property taxes in Florida was considered this week by a House committee. It requests a study to establish how much money would be lost and how local governments could recuperate that cash elsewhere.

“This law (HB 1371) is about one thing. “It’s about starting the process of phasing out and eliminating Florida’s property tax,” said Rep. Ryan Chamberlin, R-Ocala.

He told the House Ways and Means Committee that his bill would require the Legislature’s research arm (OPPAGA) to perform a study on how to replace property taxes, which finance local government services including schools and roads.

Florida currently has no state income tax. If property taxes are eliminated, the money must be made up somehow. Rep. Joe Casello, D-Boynton Beach, predicted a big hike in sales taxes.

Florida Tax Reform: Lawmakers considering potential study on eliminating property taxes

“So by eliminating the property tax which all municipalities count on, we could possibly have, would you say, one of the highest sales taxes in the nation to compensate for that loss?” Casello asked. Chamberlin said, “I believe this will really cut total taxes for the majority of Floridians if we do it correctly. But the truth is that another tax will be imposed to replace the property tax, effectively eliminating us from renting our land forever.”

Rep. Rick Roth, R-West Palm Beach, referred to the idea as an affordable housing bill. “If we can change the way we collect taxes in the state of Florida and not tax property, I think we’ll have more people being able to own property,” he stated. He predicted that rents would fall since rental property owners would no longer be required to pay property taxes.

Rep. Susan Vald├ęs, D-Tampa, called it an intriguing proposal. However, she is concerned about how a prospective increase in the sales tax rate might affect low-wage workers.

“Let’s say the taxation rate, I’m just gonna throw a number out there, let’s say it’s 30%,” he added. “For a person earning the minimum wage, that equates to 30 cents for every dollar. “That is a lot.”

It’s been a while, but the idea of abolishing property taxes has been floated in the Florida Legislature previously, but it’s never gotten far. In fact, no state has eliminated property taxes. Rep. Anna Eskamani, D-Orlando, believes there are valid grounds for this.

It is unsustainable in times of economic recession when people do not buy things, and that has happened before- 2008 as an example, and so that is a real concern,” Eskamani went on to say.

“There are additional issues in simply motivating local governments to protect property values. What incentive do local governments have to preserve property experiences if property taxes are eliminated? So you’re removing a possible motivation there.”

She said that a higher sales tax will cause customers to spend less money, resulting in less revenue for governments. That did not persuade Rep. Webster Barnaby, R-Deland.

“If you do not pay property taxes, you do not own the house. “You are renting it from the state.”

Barnaby believes the issue is one of fairness, since anyone who fails to pay their property taxes risks losing their home, even if it is fully paid for.

“This is not about how we care for cities and towns. “This is about fundamental fairness to Florida taxpayers,” Barnaby stated. “Do you own your home?” That is the question, and I would like to know if every Floridian who has finished paying their mortgage owns their home.

The bill cleared its first committee stop 15 to 6, with the voting not totally divided along party lines. There is no Senate version of the legislation.

The House proposal would demand that the study’s findings be reported to lawmakers by February 1st of next year. That would allow them to act on it at the following annual session.

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