Property Tax Trends and State Effects

Jessica IceOctober 13, 2009

LeRoy Collins Institute

LeRoy Collins Institute ~ Carol Weissert, Ph. D., Director

FSU Campus ~ 506 W Pensacola Street Tallahassee FL 32306-1601

850-644-1441 ~ 850-644-1442 fax

Outline

• Concern Over Property Tax in Florida• Population Trends• Fast versus Slow Growing Counties• Reliance on Property Tax Over Time• The Effect of Property Tax Exemptions and

Save Our Homes• Future Research

Concern Over Property Tax in Florida

The State of the Economy and Property Tax Revenues

Population Trends

Property Tax and Population

Population Distribution

Fastest and Slowest Growing Counties

• Fastest Growing as a %– Flagler– Osceola– Hernando

• Slowest Growing as a %– Gadsden– Monroe– Taylor

• Fastest Growing in #’s– Miami-Dade– Broward– Palm Beach

• Slowest Growing in #’s– Liberty– Franklin– Lafayette

Fast and Slow Growing: Percent Change

Fast and Slow Growing:Absolute Numbers

A Look at Property Tax Reliance

• Measured by property tax revenues divided by total revenues

Reliance on Property Tax Over Time

Property Tax Reliance and Population

Liberty County Miami-Dade County

Property Tax Reliance and Population Growth

Liberty County Miami-Dade County

The State of the Economy and Reliance on Property Tax

Liberty County Miami-Dade County

Property Tax Reliance• Large and Small Counties both differ on their

reliance of the property tax over time• Reliance on the property tax does not seem

related to changes in population• Nor is a clear relationship observed between

unemployment and reliance on the property tax• Possible Explanations– Large Counties are able to rely more enterprise

activities– Small Counties rely more on intergovernmental

revenues

Homestead Exemption and Save Our Homes

• In 1980 the Legislature placed a constitutional amendment on the ballot increasing the homestead exemption to $25,000

• In 1992 (implemented in 1994) a constitutional amendment (known as “Save Our Homes”) set a cap of 3 percent, or the consumer price index, whichever is less, as the rate at which homesteaded property could increase in value within a year.

Florida Residential Just and Taxable Values: 1976-2006

Just and Taxable Values (Residential)

Liberty County Miami-Dade County

Liberty County:1980 Homestead Exemption

and Save Our Homes

Miami-Dade County:1980 Homestead Exemption

and Save Our Homes

Business versus Residential Property Tax Per Capita

What is the Difference Between Slow Growing and Fast Growing Counties and the Homestead

Exemption/SOH’s?Slow Growing Counties• Median Home Price

(Liberty, owner occupied)– $36,900 (1990)– $66,300 (2000)

• Less likely to subject to in-migration

• More likely to be owner-occupied– 81.8% (Liberty)

Fast Growing Counties• Median Home Price

(Miami-Dade, owner occupied)– $86,500 (1990)– $113,200 (2000)

• More likely to be subject to in-migration

• Less likely to be owner-occupied– 57.8% (Miami-Dade)

Summary

• Conclusions• Future Research