Manatee County May Pass Property Tax Ordinance Today; Will It Do Enough?

Manatee County Commissioners can take a step toward protecting area resort owners by adopting a tax-abeyance ordinance today.

But that will amount to only a small bandage on a gaping wound that needs complex surgery and reconstruction, a Bradenton Herald editorial states. That’s what the local structure of property taxes essentially amounts to here in Florida.

Commissioners will consider a proposal that will cap the assessed valuation on temporary lodgings on Anna Maria Island and Longboat Key at their 2002 or 2003 rates and allow only a 5 percent annual increase until the property is sold. At that point the owners will be expected to pay the taxes — a major point of contention in this era of steep Florida mortgage payments — on the full value plus arrears during the period of abeyance.

It is hoped that this limit will enable owners of small resorts, who are considered the bread and butter of the local tourism industry, from being taxed out of existence by soaring property values. In the Florida real estate run-up of the last four years some small, mom-and-pop motels have seen their tax bills quadruple.

Unable to raise room rates to compensate for such cost, business owners are giving up their trade, selling out to developers who turn these properties into luxury homes or condos, whose buyers’ spending doesn’t begin to match that of short-term tourists.

Industry figures say every dollar spent at a motel room generates another $4 in spending on something else that benefits the overall economy.

Certainly the property tax relief is needed now, and action today could provide it quickly for those who have stuck it out until now. But the relief is not forgiveness — just a temporary loan. Particularly for those who are already struggling with high insurance costs and adjustable-rate Florida home loan payments, it’s not going to be a long-term solution.

Owners will still have to pay the full tax burden if and when they decide to sell out. Of course, it can be argued with the pot of money they will get for their inflated property, they will then be able to afford to pay the taxes. That is perhaps true, but begs the question of whether such a property tax policy is fair to people just trying to make a living.

Indeed, it calls into question the very practice of assessing such property according to its “highest and best” use. The only way to give permanent relief — and equity — to these and other businesses in a rapidly-rising Florida housing market is to remove that “highest and best” designation and assess them at their current use.

Reform of this statute is just one part of a larger property tax reform movement that is generating support across Florida in the current era of runaway home prices generating runaway taxes, not just on business owners but homeowners, too.

There are calls for capping property tax increases in much the same way as the Save Our Homes amendment capped assessment increases. There are also calls for making Save Our Homes portable, to allow people locked into low-taxed homes to take that protection with them if they move to a larger, more expensive home elsewhere in the state, or at least in a region.

It’s obvious that the whole issue of tax reform should be the top priority, along with insurance reform, of the new governor and next state Legislature when it convenes next spring. It’s too early to lobby for specific policy changes, but this obviously calls for a debate of all property tax issues facing Floridians.