Some Property Tax Ideas for Tallahassee

The idea of eliminating property taxes for Florida property owners is just not financially feasible for many of the counties in our state. Without this source of revenue, they would not be able to provide basic services that citizens routinely expect like police/fire, sanitation and roads. But, there are a number of ways to lessen the property tax burden – which represent a certain degree of “blue sky” thinking that has not been routinely talked about up to this point.

#1 is the idea of converting restricted funds that have not been spent within five years of collection by a county into unrestricted funds which can be used for any purpose – including a credit against a citizen's annual property tax. A fair amount of restricted funds are languishing on county balance sheets, because there simply are not enough “qualified” projects to spend them on.

#2 Tallahassee could offer a December billing holiday for sewer/water and garbage collection to all property taxpayers which would save them approximately $175.00 for that month. Cost of statewide implementation would be $875.0 million which is approximatey 7% of Florida's 2024 surplus of $12.4 billion.

#3 Some of Florida's counties have reserves (including Manatee County) which are well above the 30% of current year budget that Florida statute allows them to hold. Some percentage (say 25-50%) of the amount above statute can be returned to taxpayers as property tax credit. This can be done annually until reserves are brought down to the maximum 30% statutory level.

#4 Commit 25% of Florida's 2024 surplus to a property tax rebate check. This rebate check could become a regular annual feature of Florida's property tax relief, but would vary based on each year's surplus. For 2024, cost of the program is $3.1 billion (taken from the $12.4 billion surplus) and each property taxpayer would receive a check for $620.00.

#5 Commit Florida reserves to the same maximum reserve ratio (30%) that is imposed on the counties. Thus, Florida's cash position would be reduced by $10.8 billion, and this excess reserve would be sent as a check totalling $2160.00 to each property taxpayer. This idea could also become a regular feature of Florida property tax policy and would vary annually based on the cash amount above the maximum 30% ratio on Florida's balance sheet.

Since, Tallahassee right now is vigorously involved in discussions on property tax relief, any of these ideas are legitimate food for the grist mill legislative process. Hope they pick one or two!

Mike Meehan, CFA, MBA