Ever since DeSantis came out with his proposal to virtually eliminate property taxes, by social media feeds have been absolutely overrun with people screaming about how towns will go bankrupt and have to shut down police, fire, and roads. It is so pervasive and widespread, it’s like a chorus. They are also being misleading.
I want to use my town as an example. For a reminder on how Florida does property taxes, you can read this old post from a year ago. Where I live is a town with 3500 people living in about 900 households. Our only commercial property consists of a convenience store and a single diner. Of those households, nearly a quarter of them (18%) pay less than $200 a year in non-school taxes.
Town revenue breaks down like this:
- 29% of revenue is from ad valorem taxes, with almost half of it (14% of the total revenue) being from ad valorem taxes on homestead property.
- 29% of revenue comes from fees for services (fees for water, sewer, trash, and other city services)
- 20% from state and federal funding
- 10% from shared taxes with the county
- 10% from utility taxes
- 2% miscellaneous sources
Keep in mind that the town LOVES my neighborhood, because the people in it comprise only 1/10 of the town’s population, but pay about 25% of all ad valorem taxes. Another 18% pay nothing, or nearly so. The governor’s plan would increase homestead exemptions to $250,000 (from $50,000 currently) in the first year, then to $500,000 the second year, meaning no one would pay taxes on any home until its value was more than $500,000, except for school taxes, which would remain unaffected. A complete loss of ad valorem taxes on homestead property would mean the city would face a loss of 14% of their revenues. What would have to be cut? Let’s look at the town budget. This is where the town budget goes:
- 33% to the Police department
- 29% to Administration, Finance, Legal, Legislative, and Planning
- 22% to Public Works and solid waste
- 10% to the library
- 2% to Code Enforcement
- 3% to Historical Preservation, Cemetaries, and Special Events
- 1% to parks and recreation
It seems to me that the town is pretty top heavy in administration, the library is an extravagance, and I would argue that a town of 3500 people doesn’t need 15 police officers. I would cut the library, and I would cut the police and admin budgets by 10% each. That takes care of most of the cuts you need right there.
- Will a small town with almost zero crime miss a single cop being cut from the budget? Likely not.
- Likewise, the library just isn’t as important as it used to be in the age of the Internet. Certainly not important enough to take money from residents, and taking the homes of those who won’t pay.
- and seriously, a third of the city budget being administrative overhead?
The town has 50 employees, with 15 being law enforcement officers. Granted, 20 of the town’s employees are seasonal or part time, but that seems like a heavy dead load for a town of 3500, where a fifth of them aren’t paying any taxes at all.
Since 2020, the town’s total revenue has increased 250%, but the population has only increased by 6%.
Losing ad valorem taxes on homestead property isn’t just doable, it’s the only way to curb the bloat. Towns are treating these massive windfalls from taxation like a teenager who just found his dad’s credit cards.
0 Comments