A proposal aiming to initiate the process of eliminating property taxes in Florida was discussed in a House committee this week. The proposal calls for a study to assess the potential loss of revenue and explore alternative methods for local governments to recover that income.
According to Representative Ryan Chamberlin, a Republican from Ocala.,”This bill (HB 1371) is about one thing. It’s about starting down the road toward phasing out and eliminating Florida’s property tax.”
He informed the House Ways and Means Committee that his proposal entails instructing the Legislature’s research arm (OPPAGA) to undertake a study on the feasibility of replacing property taxes, which currently fund services such as schools and roads at the local government level.
Florida currently lacks a state income tax, so if property taxes are eliminated, an alternative source of revenue must be identified.
Representative Joe Casello, from Boynton Beach, pointed out that this would probably necessitate a substantial hike in sales taxes.
“So by eliminating the property tax which all municipalities count on, we could possibly have, would you say, one of the highest sales taxes in the nation to compensate for that loss?” Casello asked. Chamberlin replied, “I believe this is going to actually lower the overall taxes on most Floridians if we do it properly. But the truth is, there will be another tax to replace this property tax to eliminate us renting our property forever.”
West Palm Beach representative Rick Roth referred to the legislation as an affordable housing bill.
“If we can change the way we collect taxes in the state of Florida and not tax property, I think we’ll have more people being able to own property,” stated Roth. He proposed that since owners of rental properties wouldn’t have to pay property taxes, rent would therefore decrease.
It’s an intriguing idea, according to Rep. Susan Valdés, a Democrat from Tampa. However, she is worried about the effects a prospective increase in the sales tax rate will have on low-paid employees.
“Let’s say the taxation rate, I’m just gonna throw a number out there, let’s say it’s 30%,” Valdés stated. “For a person that works minimum wage, that’s 30 cents to every dollar. That’s a lot.”
The idea of doing away with property taxes has been floated in the Florida Legislature for some time now, but it has never really taken off. No state has actually outlawed property taxes. Rep. Anna Eskamani, a Democrat from Orlando, claims there are valid explanations for this.
“It is unsustainable in times of economic recession when people do not buy things, and that has happened before- 2008 as an example, and so that is a real concern,” Eskamani stated. “There’s also challenges when it comes to just incentivizing local governments to maintain property values. If you get rid of property taxes, what is the incentive for local governments to even maintain property experiences? So you’re eliminating a potential incentive there.”
She went on to say that if the sales tax is raised, people will spend less money, which will mean that towns will receive less money. Representative Webster Barnaby (R-Deland) was unconvinced.
“If you do not pay property taxes, that house is not yours. You’re renting it from the state.”
According to Barnaby, the problem is one of justice since, even in cases where a home is fully paid for, those who fail to pay their property taxes risk losing it.
There were some lengthy party lines in the vote, which resulted in the bill passing its first committee stop 15 to 6. The bill does not exist in Senate version.
According to the House proposal, lawmakers would need to receive the study’s findings by February 1st, 2019. They would then have the chance to take action on it during the following yearly session.
