property tax reform update march 27, 2007. property tax reform january 30, 2007 bcc meeting tax...
TRANSCRIPT
Property Tax Reform
• January 30, 2007 BCC Meeting
• Tax Reform Proposals
• Fishkind & Associates
• Orange County Budget
• County Staff Efforts
• Summary
Property Tax Reform
• January 30, 2007 BCC Meeting
• Tax Reform Proposals
• Fishkind & Associates
• Orange County Budget
• County Staff Efforts
• Summary
January 30, 2007 BCC Meeting
• Presented Reform Proposals– “Save Our Homes” Portability– Double Homestead Exemption– Revenue/Expenditure Caps
• Possible 5-yr Fiscal Impacts of those Proposals: approx - $776 Million
Property Tax Reform
• January 30, 2007 BCC Meeting
• Tax Reform Proposals
• Fishkind & Associates
• Orange County Budget
• County Staff Efforts
• Summary
Tax Reform Proposals
• Governor’s Proposals
– Make “Save Our Homes” Benefit Portable
– Double Homestead Exemption & Index to Inflation
– Cap Assessed Value Increases to 3% Annually for ALL Properties
– Exempt First $25,000 of Tangible Property from Taxation
Tax Reform Proposals
• Governor’s Proposals
– “Save Our Homes” Portability
• Grant the Ability to Transfer an Existing “Save Our Homes” Benefit to a New Property
• Tax Rolls Would Grow at a Progressively Slower Rate
• Orange County Would Lose approximately $79 Million in Tax Revenues Over the Next 5 Years
Tax Reform Proposals
• Governor’s Proposals
– Double the Homestead Exemption to $50,000 & Index to Inflation
• Would Reduce Orange County’s Budget by approximately $40 Million
• Over 5 Years the Impact is approximately $200 Million
Tax Reform Proposals
• Governor’s Proposals
– 3% Assessed Value Cap for ALL Properties
• Aims to Provide Tax Breaks to All Property Owners Including Large Corporations
• Impact of approximately $892 Million to Orange County Over Next 5 Years
Tax Reform Proposals
• Governor’s Proposals
– 5 Year Impact of Governor’s Proposals
• Small Business Exemption $ 5 Million • Full Portability $ 79 Million• Double Homestead Exemption $200 Million• 3% Assessed Value Cap $892 Million
• Total Approximately $1.2 Billion
Tax Reform Proposals
• House Proposal
– Phase I
• Roll Back Millage Rates to 2004 Plus CPI and New Construction
• Cap Future Annual Property Tax Growth to CPI and New Construction
- Requires unanimous vote to change- Revenue Sharing Implications
• Provide a $25,000 Exemption on Tangible Personal Property Taxes for Businesses
Tax Reform Proposals
• House Proposal
– Phase II – Two Components
1) Replace State Imposed School Property Taxes (Required Local Effort) on Homesteaded Property with 1 Cent Sales Tax Increase
2) By 2010, Countywide Referendum Must be Held to Give Residents the Choice to Replace All Remaining Homestead Property Taxes with up to an Additional 1.5 Cent Sales Tax Increase
• 0.5 Cent for School Taxes• 1 Cent for County, Municipalities, & Special Districts
Tax Reform Proposals
• House Proposal
– Fiscal Impact – Phase I » Approximately $130 Million
– Fiscal Impact – Phase II» No Impact First Year
Tax Reform Proposals
• Historical Growth: Property Tax Revenue Compared to Sales Tax Revenue (Adjusted for Article V)
-5
0
5
10
15
20
2002 2003 2004 2005 2006
(Gro
wth
Rate
%)
Property Taxes Sales Tax
Tax Reform Proposals
• House Proposal
– “If local governments don’t embrace it [the house proposal], they could face much harsher changes.”
– House Speaker Marco Rubio Orlando Sentinel - March 15, 2007
Tax Reform Proposals
• Senate Proposal
– A Plan is Expected in the Coming Weeks
– “There is no support in the Senate for increasing the state’s sales tax, effectively declaring the measure dead in that chamber”
– Orlando Sentinel – March 21, 2007
Property Tax Reform
• January 30, 2007 BCC Meeting
• Tax Reform Proposals
• Fishkind & Associates
• Orange County Budget
• County Staff Efforts
• Summary
Fishkind & Associates
• Counties have Experienced Major Cost Increases for:
•Fuel•Health Insurance•Property Insurance•Pensions•Constitutional Officers (Courts,
Sheriff, etc)
Fishkind & Associates
• A Majority of Additional Ad Valorem Revenue in Counties has been Spent on Public Safety
• Spending Growth in Other Areas Attributed to Inflation & Population Growth
Fishkind & Associates
• No Evidence of Large Increases in Staff
• No Evidence of Extravagant Spending
Fishkind & Associates
• Cost of Government: Budget per Capita
$2,896 $2,969 $2,914$3,086
$1,351 $1,440$1,327$1,334$1,208
$3,181
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
2003 2004 2005 2006 2007
Operating Expenses Total Budget
Fishkind & Associates
• County Employees per 1,000 Population
7.4 7.3 7.4 7.2 7.1
2
4
6
8
10
12
2003 2004 2005 2006 2007
# o
f Em
plo
yees
BCC
Property Tax Reform
• January 30, 2007 BCC Meeting
• Tax Reform Proposals
• Fishkind & Associates
• Orange County Budget
• County Staff Efforts
• Summary
Orange County Budget
• Preparation of Two-Year Budget is Continuing
– Departments are Preparing for Budget Cuts
– Letters Sent to Constitutional Officers and Outside Agencies Regarding Possible Funding Cuts
– Final Decision on Budget Adjustments is Pending
Property Tax Reform
• January 30, 2007 BCC Meeting
• Tax Reform Proposals
• Fishkind & Associates
• Orange County Budget
• County Staff Efforts
• Summary
County Staff Efforts
• Taking a Proactive Approach:
– Analyzing Proposals• Determining the Impact of Tax Reform
Proposals as they are Received
– Discussions with Stakeholders• Florida Association of Counties• Florida League of Cities• Orange County Council of Mayors• Standing Meeting with Orange County Cities
County Staff Efforts
• Taking a Proactive Approach Contd:
– Delivering Informative Presentations• West Orange Chamber of Commerce• Central Florida Hotel & Lodging Association• Police Benevolent Association• Orange County Sheriff’s Office• Various Orange County Departments
Property Tax Reform
• January 30, 2007 BCC Meeting
• Tax Reform Proposals
• Fishkind & Associates
• Orange County Budget
• County Staff Efforts
• Summary
Summary
• Current Proposals will have a Significant Impact on Orange County– Budget must be Balanced– Level of Service will be Reduced in Certain
Areas
• Staff will Continue to Monitor All New Developments