Fort Lauderdale Resident Wants Reformed, Fair Market Value Property Tax System

William R. Scherer, Jr., a resident of Fort Lauderdale, penned this recent editorial to the South Florida Sun-Sentinel in response to the swirling property tax debate gripping the region.

In an era where Florida mortgage costs, homeowner’s insurance and property taxes have all risen through the roof, many South Floridians likely share his viewpoints about what must be done.

Here’s his editorial, which was originally published by the South Florida Sun-Sentinel and can be accessed via this link.

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Recently, I was quoted in a South Florida Sun-Sentinel article highlighting the inequity of our property tax system in Florida. My home was featured because of the large gap between the assessed value and the much lowered taxable value of our homes because of the Save Our Homes amendment.

To the chagrin of some friends, I stated I would gladly forego big tax savings that I currently enjoy for a fairer, more broad-based free market approach.

So everyone does not think I have become totally altruistic, a fairer system would serve my financial interests because our business properties and businesses that I am involved in would similarly benefit by having lower taxes if the entire burden was more evenly split.

The property tax system is completely broken, unfair and discriminatory and the only way to fix it fairly and equitably is to assess all property at fair market value.

The Save Our Homes Amendment that was supposed to be a safety net for taxpayers has actually become a tangled web that has snared homeowners and trapped them in their homes.

Many homeowners’ property tax and insurance bills are almost as much as the Florida mortgage loan payment. No one can afford that.

Owners of non-homesteaded, rental housing and commercial real estate are paying far more than their fair share. That discourages out-of-state investment, saps the supply of affordable housing and artificially drives up the costs of doing business here.

As a result, the Florida real estate market is depressed, visitors our economy relies upon are being priced out and wages of employees at local businesses are lower than they otherwise could be.

In other words, no one wins with our current system. If all homes and businesses were assessed at fair market value, everyone would be better off.

Instead of the current tax rate of 2.2 percent in Fort Lauderdale, the rate would be significantly less to raise the same amount of money to finance our city and county governments as well as school and hospital districts.

That would result in many paying less. Some long-time homestead exemption qualifiers in more expensive neighborhoods would pay more. However, many owners of expensive homes have businesses that are overtaxed, so many of those residents would end up paying less on a cumulative basis.

The exemption itself only results in a $500 tax break. It’s the 3 percent annual cap on increases in assessed value that artificially holds down the assessments, forces non-homestead properties to pay more than their fair share of tax and puts people into tax shock when they decide to sell and buy a new home.

If all property was taxed at fair market value, people would be free to sell a home and buy another without being hit with a huge tax increase. Older folks could sell their large home and buy a smaller place and pay less tax rather than more, as they would now.

Of course, the other side of the equation is government spending.

During the real estate boom of the last few years, government entities chose to spend the windfalls they received rather than being frugal and cutting their mill rate.

Most voters with exemptions weren’t paying attention because their property taxes increased only marginally and the increased government spending didn’t really affect them as long as they didn’t want to move.

If everyone was assessed on fair market value, they would keep a closer eye on what their governmental bodies spend each year because they’d see it clearly on their annual tax bills.

Of course, there may always be a need for some type of property tax relief for very low income people or people with disabilities.

A fair market value system would be more equitable for everyone and even result in lower taxes for many. It would be transparent and understandable, while providing a badly needed check on government spending.