Florida House Speaker Calls For Comprehensive Insurance, Property Tax Reform

In 1994, property taxes statewide took $32 out of every $1,000 the economy in Florida produced; today almost $44 of every $1,000 in productivity are eaten up by property taxes. During that period, the property tax burden per Florida household doubled from $1,500 to $3,100.

That’s a lot to cope with on top of Florida mortgage costs and insurance premiums that are already through the roof. But what do we do about it?

Marco Rubio is the speaker of the Florida House of Representatives. The West Miami Republican wrote the commentary below for the Orlando Sentinel, touching on the need to make property taxes and homeowner’s insurance affordable for Florida families and preserve the American Dream they’ve come to expect from this great state.

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For decades, families from all over the U.S., and the world, came to Florida to pursue the American Dream. In return for letting people pursue their dreams free from burdensome taxes, Florida experienced an era of unprecedented growth and prosperity.

Florida remains a land of promise, but we cannot ignore the threats that loom directly before us. The threat of unaffordable housing - caused in no small part by property taxes and property insurance - have created a cost-of-living crisis here in Florida.

This week, the Legislature has convened in special session to address the first part of this crisis, insurance.

The seven hurricanes that battered Florida over a 13-month period have left our insurance marketplace in shambles. During this special session, we hope to make comprehensive changes to our current homeowner’s insurance regulations.

We are going to advance innovative ideas in order to make home insurance more fair and bring back our private insurance market for more competition and consumer choice. Perhaps the most significant change would be to allow the state to sell more reinsurance to private insurers at prices below the market rate. In return, we should require insurers to pass those savings directly to consumers in the form of lower rates.

Addressing these issues will help to stabilize and hopefully lower the cost of Florida insurance. But addressing property insurance alone will not solve our crisis. We must also address the second threat facing our state: unaffordable property taxes.

The problems with Florida’s property tax system are numerous.

First, our property taxes have been growing faster than our ability to pay for them and have begun to slow Florida’s economic growth and inhibit housing affordability. Despite the Save Our Homes amendment voters added to our Constitution in 1992, property-tax revenues in Florida have been growing faster than personal income since 2000.

Since 2000, taxes have increased by 80 percent, compared with total personal income growth of 39 percent and inflation plus population growth of 32 percent over the same period.

In Orange County, government coffers have swelled by almost half-a-billion dollars between 2000-2004 - a 36 percent growth in government taxing and spending. Yet where’s the relief for those struggling every month to pay their Florida home loan?

Our system distorts the tax burden among different classes of property owners. We have limits on the amount that taxes can increase each year on homesteaded property, but there are no protections for rentals or commercial real estate, resulting in astronomical increases in property taxes.

Even homeowners who have benefited from Save Our Homes are under pressure from our property-tax system. Today, baby boomers who are downsizing to smaller homes, or young families needing a larger home because of a new baby, are likely to see their property taxes skyrocket if they move, even if they purchase a home worth less than the one they are selling.

Too many Floridians are literally trapped in their homes because of the tax burden they face if they sell their current home.

Some will argue that these increases are justified. Their rebuttals may be valid, but they are all immaterial. The bottom line is that when taxes, from any level of government, begin to rise faster than personal income, you have a recipe for economic disaster.

Government simply cannot provide more government than people can afford.

Patience is usually a virtue, but this is one issue I hope we are impatient about. Instead of waiting until the 2008 election, we should place comprehensive property tax reform on the ballot for a special election early this summer, so that Floridians will experience property tax relief this year.

The American Dream is still alive in Orlando and throughout Florida, but it is threatened by a cost-of-living crisis, and this crisis will not go away on its own. Left unresolved, it will make Florida increasingly like those states from which so many of our people fled.

The legislative process can be slow and cumbersome. Usually that is a good thing, but times of crisis require swift and bold action. That is what is required of us now. Working together - Republicans and Democrats, state and local governments - we can enact real reforms and protect the dream.