Broward County Property Values Rise, Tax Worries Fueled
The yearly growth of Broward County’s tax base has lost some of its feverish pace but still hit almost 11 percent, adding fuel to demands for property tax reform.
Preliminary data released Wednesday by the Property Appraiser’s Office show the taxable value of homes and businesses rose from $157.5 billion to $174.8 billion for the 2007 tax year. The growth rate is down from the previous year’s record 19 percent, but exceeded single-digit percentages posted before the Florida real estate boom began in 2001.
Unless local governments roll back tax rates or state legislators overhaul the tax system, many Florida mortgage holders should brace for higher tax bills this fall. Because of the way the state’s property tax system works, local governments collect more money as real estate values increase, unless there are cuts in tax rates to offset the growth.
New buyers, business owners, snowbirds, landlords and anyone else without the protection of state homestead tax breaks will bear the brunt. Only longtime homeowners would be relatively unaffected because the breaks will cap the increase in their taxable value to 2.5 percent this year.
Already faced with property owners angry over increasing tax bills, state legislators will meet in a special session next month to discuss the issue and warn local officials not to expect to cash in on the higher values this year. The Broward county housing market and its 31 cities have raked in an extra $1.4 billion in taxes over the past five years because of the growing tax base.
“If the county and cities aren’t going to roll back taxes on their own, we are going to have to cure the ill for them in Tallahassee,” said state Rep. Ellyn Bogdanoff, a Fort Lauderdale Republican who is part of the House leadership.
Rising Florida real estate prices accounted for $14.4 billion of the $17.3 billion increase, with new construction making up the rest. Although an 11 percent growth rate is historically high, the tax data show signs of change on the horizon.
The only city that posted significant gains in its tax roll because of development was Parkland, one of the few areas with sizable tracts of open land available. Construction’s impact last year on the tax rolls of 13 cities, including Oakland Park and Deerfield Beach, was less than 1 percent.
The taxable value of existing homes and businesses grew substantially because the housing market had just begun to cool in 2006, said Joe Zdanowicz, who oversees assessments for Property Appraiser Lori Parrish. He said that although the number of sales plummeted, prices increased over 2005.
Values increased the most in central Broward, something Zdanowicz attributed to a concentration of housing affordable to middle-income families. Lauderdale Lakes, Lauderhill and North Lauderdale each posted gains in their tax bases of more than 13 percent even before new construction was included.
Values increased only slightly in coastal communities - less than 6 percent in both Hillsboro Beach and Lighthouse Point before new construction is considered. Zdanowicz said buyers of higher-priced homes had become more conservative on what they will pay.
Parrish warned cities in a letter sent Wednesday that the growth years are over, for now. She said sales data for the first five months of 2007 show prices falling. That could indicate next year will be the first decline in the tax roll since 1992.
Once the tax roll is finalized July 1, the county, city governments and other taxing authorities will use the data to set their annual budgets and tax rates this fall. Parrish will send Florida mortgage loan holders notices of the new values in August.
The question is, what will legislators do when they meet starting June 12. Proposals call for governments to roll back taxes and cap spending.
County Mayor Josephus Eggelletion said he hopes legislators see that the tax base growth is beginning to level off and give local governments the chance to rein in spending on their own. County commissioners are currently looking at cutting spending 10 percent across the board and have said they don’t want to benefit this year from higher values.
“We will take a real leap, and the majority of taxpayers in Broward County will receive a tax cut this year,” Eggelletion said. “We want to give this increase in value back to people as a reduction in their taxes.”
Parkland Mayor Michael Udine agreed. His city reaped millions in extra taxes by leaving its tax rate the same for years, but lowered it last year for the first time. He wants to do so again.
“We are committed to running a lean ship and making it easier on our residents because everyone is having difficulty with property taxes,” he said.
SOURCE: The Sun-Sentinel
