Active rain note:  this article was written for the consumer on my Real Opinionated  blog, so forgive some of the simplistic explanation. 

Governor Christ is a Tampa native, so we try to give him the benefit of the doubt when it comes to policy initiatives. His most recent crusade is to try to make housing more affordable to the common folk (an initiative which we support fully), but he may be going about it the wrong way.

One of his ideas is to increase the homestead exemption in Florida to $50K. For those of you who don’t know, a homestead exemption is a benefit of owning in home by which the taxable value of your primary residence is depreciated (or lowered) for the purpose of figuring your annual tax bill. For instance, the current homestead exemption in Florida is $25K. My home has a taxable value of $250K. Because my home is my primary residence, the homestead exemption applies and my taxable value is lowered to $225K. Thus, I pay less in taxes. Pretty cool, right?

There’s only one problem: There are two main factors that determine how much you pay in taxes. One is the taxable value of your home. The other is the millage rate.

What the heck is a millage rate? The term “millage” comes from a latin word (we’ve had lots of those lately) per mille meaning, literally, “for every thousand.” Basically, the number represents how many dollars you pay in taxes for every thousand dollars of assessed value for your home. In Hillsborough County, it’s pretty close to 22 dollars per every thousand dollars of assessed value. You get the point.

So, let’s say that Pasco County needs $1 Billion to fund it’s operations next year. If they don’t get $1 Billion, things stop working. People stop getting paid. Bad things happen. Believe me when I say that Pasco County WILL get their $1 Billion. So, if the Governor lowers the taxable value of every homesteaded property in the State, what’s to stop the Pasco County Commission from raising the millage rate to recover the difference?

I do like the idea of doing away with property tax altogether.  News today indicated that the Florida House of Representatives have passed legislation that will put the option on the table to replace the property tax system with an additional sales tax in Florida.  I like the idea, and here’s why:

When property taxes are rolled out, the homeowners of our community are solely responsible for paying their tax.  It’s a fair system.  I have no basic problem with it.  However, a great deal of the dollars spent in Florida are spent by our Northern friends who like to come and vacation, lay out on our beaches, and spend their hard earned cash on our mojitos.  It seems as if it would be most beneficial to me to pass off the burden of paying my property tax, at least in part, to those good folks.  

Also, under the current system those who rent rather than buy have basically no obligation to help support the building of roads and the funding of schools, regardless of the fact that they use both.  The sales tax alternative would get these people involved.