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Lower Values Drive Property Taxes Down by $1.5 Billion

Florida’s housing crash continues to echo through local governments, with two-thirds of counties collecting less property taxes than a year ago and most tax rates also down, according to a new study by the Florida Association of Counties.

Gov. Charlie Crist championed the January 2008 Amendment 1 tax-cutting measure with the promise that it would force then-skyrocketing property taxes to “drop like a rock.”

But the FAC study says the vast economic recession is the leading cause of the $1.5 billion decline in property taxes over the past three years. The recession has prompted 48 percent of the drop -- $730 million – while Amendment 1’s tax rollbacks have contributed 29 percent of the decline -- $430 million.

“The significance is a surprise, but we did expect to see a market correction,” said John Wayne Smith of the Florida Association of Counties. “That’s why when we were working with the Legislature on property tax reform, that we didn’t want it to go too far and not take into consideration changes in the housing market.”

The level of property tax collections peaked in 2006-07, when counties pulled in $11.5 billion, a sharp boost from previous years and fueling voter outrage that led to the passage of Amendment 1.

But with housing values slumped and Amendment 1’s tax limits, county tax collections are expected to continue to decline and reach 9.3 billion in 2011.

“For the most part, this is going to have a major impact on counties well into the future,” said Rodney Long, FAC president and an Alachua County commissioner.

County officials in many communities have been drawing fire from residents angered by efforts to increase property taxes to offset the decline in revenues, which has caused widespread layoffs among local governments.

The FAC study shows that while 40 counties increased their property-tax rates this year, 36 of them climbed to rates that are still below the level needed to collect last year’s revenue total.

Lee County – the epicenter of the state’s housing decline where foreclosures are among the highest in the nation – plan to boost their so-called rollback rate by about 24-cents per $1,000 in assessed value. But the increase still left the county with $93 million less in tax collections than a year earlier – a 22 percent drop.

The study showed that 52 Florida counties have proposed tax rates below the rollback level and another six have matched that figure. Nine counties have proposed tax rates topping the rollback level – Nassau, Alachua, Washington, Calhoun, Monroe, Osceola, Holmes, Okeechobee, and Baker.

Across Florida, 44 counties will have less property-tax revenue than a year ago – with budgets in 14 counties down 10 percent or more, the study showed.

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