Tax drop looms darkly for many Florida real estate markets
Florida’s housing crash is reverberating through local governments, with two-thirds of the state’s counties collecting fewer property taxes than a year ago and most tax rates also down, according to a new study by the Florida Association of Counties.
That has far-reaching implications for state and local finances, whose shaky conditions will serve as a brake on economic recovery and revival of local real estate markets.
But the counties’ study — which examined property tax revenues and tax rates over the past three years — shows the vast economic recession is the leading cause of the $1.5 billion decline in property tax collections as home and commercial values plummeted over the past three years.
The recession has contributed 48 percent of the drop in county revenue — $730 million — while Amendment 1’s tax rollbacks have contributed 29 percent of the reduction — $430 million, according to the study. County tax cuts round out the remaining $340 million, or 23 percent of the dollar reduction.
“Things don’t happen in isolation and declining revenue means services get cut, workers lose their jobs, and those workers aren’t spending money in the local economy,” said Sean Snaith, a University of Central Florida economist. “It becomes a quality of life issue for a lot of people wondering why their community is eroding.”
Across South Florida, the decline in home values is dramatic.
In Broward, the county’s overall taxable value fell $18 billion this year from $166.4 billion in 2008, the study said. Miami-Dade lost $17 billion from the $239 billion worth of taxable property in 2008; and Palm Beach County dropped $18 billion from $159.6 billion a year earlier.
It’s a double-edged proposition: homes are at bargain prices, but the promise of further declines reduces the incentive and ability of current Florida residents to trade up, and widespread economic weakness could discourage many out-of-state buyers from coming in.
County tax receipts have plummeted with property values.
“For the most part, this is going to have a major impact on counties well into the future,” said Rodney Long, president of the Florida Association of Counties and an Alachua County commissioner.
County officials in many communities — particularly across South Florida — have been drawing fire from residents angered by efforts to increase property taxes to offset the flagging cash-flow, which has caused widespread worker layoffs among local governments.
But the FAC study showed that while 40 counties increased their property tax rates this year, 36 of them climbed to rates still below the level needed to collect last year’s revenue total.
Lee County — epicenter of the state’s housing decline, where foreclosures are among the highest in the nation — plans to boost its so-called rollback rate by about 24 cents per $1,000 in assessed value. But the increase still leaves the county with $93 million less in tax collections than a year earlier — a 22 percent drop.