It should come as no surprise that almost every Florida county is facing a significant budget shortfall as a result of drastically reduced property values. Property taxes are based on the aggregate assessed property value multiplied by the millage rate set by local governments. Since assessed property values have plummeted over the last 2 years, counties have two choices:  raise millage rates or cut spending drastically. Some counties are looking to do the former without really addressing the latter while others will raise millage rates somewhat while cutting as much fat as possible from their budgets.

Not surpisingly, when real estate skyrocketed in value, counties were flush with property tax dollars and their budgets expanded accordingly. Now that those collections have diminished greatly, many county commissioners are finding it difficult if not impossible to rein in spending.

Palm Beach County Commissioners are looking at hiking property taxes by as much as 14.9%. Please click the link below to read the full article that ran in the Palm Beach Post. Commissioners in Broward, Dade, Lee, and other counties around the state are similarly debating increased millage rates as are many municipalities and school boards. Some counties like Collier have already increased their property tax rates but are still debating increases for unincorporated owners to whom they provide services.
http://www.canfl.com/pdfs/Palm%20Beach%20tax%20rate%20hike-6-29-09.pdf

If you purchased your home before the dramatic upswing in real property values (approximately 2003-2007) you are almost certain to see your tax bill increase in the fall even while your home value falls. The assessed value of your home was set at the time you purchased the property and is tied roughly to the amount you paid; the assessed value is then readjusted annually by the tax assessor. However, since 1992, the Save Our Homes law has capped increases in the assessed value at the inflation rate or 3%, whichever is lower.  The upside for longtime owners is that they paid much less in property taxes than those folks who bought during the bubble. Of course, when the pendulum swings in one direction it always returns to the other side eventually. If you bought during the bubble, your assessed or taxable value is probably still higher than the current market value. Thus when your tax assessment is lowered your tax bill will be reduced. Bubble buyers are likely to see a slashed tax bill. Long-time buyers are a different story.

If you are a long-time buyer who bought well before the bubble, your assessed value is probably still considerably lower than the current market value. In addition, under the Save Our Homes law, your assessment must rise each year until the assessed value equals market value. Thus, even though your home may still be losing value in real market terms, according to the tax assessor it's actually gaining value from a tax perspective.

For owners with homestead protection this could mean a minimal increase in some cases. More recent homeowners will actually see cuts. Still, even minimal increases may be a tough pill to swallow while property values continue to fall. Every CAN member should take advantage of the local page of the Capitol Connection at www.canfl.com to email your county commissioners and local media on the issue of proposed property tax increases. It takes only seconds to use the Capitol Connection to email every member of your local county commission.  In most cases, it's not too late to demand your commissioners and school board members address their budget shortfalls with methods other than increasing millage rates and raising your property taxes! On a related note, if you can document that your property has Chinese drywall, the Property Appraiser's Office in Broward County has said that it will lower the taxable values on those homes/units with proper documentation of the problem. If you live in another county and have Chinese drywall please address the matter with your local property appraiser's office.
 

Donna Berger, Esq. -- Executive Director, Community Advocacy Network