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Three Florida Ballot Measures Take Aim At Taxes

Three proposals on the November ballot that would make tax-related changes to the state Constitution have drawn conflicting views from the real-estate industry, local governments and other groups about the measures’ potential economic impacts.

Amendment 1 seeks to create a bigger property-tax break for many homeowners by increasing the homestead exemption by $25,000.

Amendment 2 would make permanent a 10 percent cap on annual property-tax assessment increases for commercial property, apartments and vacation homes.

Related: Election News & Voter's Guide

Amendment 5 would make it tougher for future lawmakers to raise taxes by requiring two-thirds votes in the state House and Senate to increase taxes or fees, up from the usual majority.

To be added to the state Constitution, each proposal requires 60 percent support from voters in the Nov. 6 election.

Amendments 1, 2 and 5 were crafted the past two legislative sessions, with the most debate surrounding the proposals to increase the homestead exemption and to require two-thirds legislative votes to hike taxes or fees. The tax-related proposals are among 12 constitutional amendments slated for the November ballot.

University of Central Florida political-science professor Aubrey Jewett said voters aren’t getting enough information on any of the amendments.

“When it comes to these proposed amendments on the 2018 ballot, we are basically asking Florida voters to find their way through the political Everglades at night without giving them a map or a flashlight,” Jewett said.

That could, however, help proposed amendments that offer tax cuts and limit future taxes, Jewett indicated.

“Unless a compelling reason is presented on why they should not cut (or) limit taxes, the majority of voters will want to pay less,” Jewett said. “It is a perfectly predictable American idea that literally goes back to the founding of country.”

But Susan MacManus, a distinguished professor of government and international affairs at the University of South Florida, said a lack of information could actually hinder the proposals.

MacManus, who has been traveling the state talking to groups about the amendments, said she could see many people skipping the proposed constitutional amendments, which appear at the end of a long ballot and offer summaries that provide little information and might be confusing.

She said human nature is to “just read the summary and do an on-the-spot analysis.”

“I had to have one of my econ students, and I had to read (Amendment) 1 20 times, to figure out what it was because you’ve got countervailing things,” MacManus said. “You’ve got one group arguing this is really a great tax break for everybody and you’ve got another group saying. ‘This isn’t going to benefit anybody but the rich.’ ”

Amendment 1

One of the critics of Amendment 1 is the Tallahassee-based Florida TaxWatch, which recently released a study that said the proposal will “likely increase, not lower, taxes for all Floridians.”

TaxWatch estimates that 43 percent of homesteaded property, 76 percent of all properties and 71 percent of Florida families will not benefit from the exemption. Also, that is before local governments would have to find ways to make up for lost revenue through increasing taxes or cutting services.

“This isn’t the first time we’ve seen a proposed tax shift masquerading as a tax cut,” said Florida TaxWatch President & CEO Dominic Calabro. “Florida has an inequitable property-tax system, and this exemption will make the system even more unbalanced.”

The proposal asks voters to approve an additional non-school homestead exemption to the portion of property values between $100,000 and $125,000.

Currently, homeowners receive a tax exemption on the first $25,000 in value of their properties. They pay taxes on the value between $25,000 and $50,000 and then receive an additional exemption on the portion from $50,000 to $75,000.

Backers say it will benefit homeowners across the state.

“Simply put, a yes vote on Amendment 1 lowers taxes and puts more money back in the pockets of Floridians,” said the James Madison Institute, a free-market think tank. “The average homeowner would see $230 in annual property tax savings.”

When the measure moved through the legislature in 2016, House Speaker Richard Corcoran, R-Land O’ Lakes, said the exemption “will be one of, if not the largest, tax cut in the history of Florida at $645 million.”

Sen. Tom Lee, a Republican home builder from Thonotosassa who sponsored the proposal when it was approved by the Legislature in 2017, said expanding the exemption could help people afford homes. Also, he said it could boost such things as documentary-stamp taxes, which stem from real-estate transactions.

“Making homes more affordable, we’re going to allow people to move from rental units back into homes,” Lee said. “And in doing so, it’s going to give us the ability to generate revenue for doc stamps, the tangible tax and a whole host of other things that go along with home ownership.”

The proposal would be estimated to cut local government revenue statewide by about $645 million a year. It would require the state to offset revenue losses for “fiscally constrained” counties in rural areas.

The Florida Association of Counties, the Florida Education Association, the Florida League of Cities and the League of Women Voters of Florida are among the opponents of Amendment 1.

The League of Cities said approval of Amendment 1 would make an already-complicated property tax system “worse” and “less fair.”

“We are hopeful that Florida voters see that Amendment 1 isn't what it seems,” said Amber Hughes, the senior legislative advocate for the Florida League of Cities. “The politicians call it a tax break, but it's really a tax shift that will leave millions of hard-working homeowners with a bigger share of the property tax burden.”

Amendment 2

The real-estate industry group Florida Realtors has poured millions of dollars into an "Amendment 2 is for Everybody" campaign, which says the measure “prevents taxes from skyrocketing, hurting the economy and making rents too expensive.”

Voters in 2008 approved a constitutional change that placed a 10 percent cap on annual increases in assessed values of non-homestead properties. The limit will expire Jan. 1 unless it is extended by voters in November through passage of Amendment 2.

The state Revenue Estimating Conference projected local governments would see about $700 million in additional revenue if voters reject Amendment 2.

The League of Women Voters opposes the measure, contending that “no tax sources or revenue should be specified, limited, exempted, or prohibited in the Constitution.”

Amendment 5

The League of Women Voters and the Florida Education Association teachers union oppose Amendment 5, arguing that during an economic crisis, the proposal would tie the hands of lawmakers.

“By requiring a supermajority vote of the Legislature for approval of any future tax or fee increase, what they’re doing is empowering a super-minority of politicians who will be able to block any attempts to eliminate any loopholes, tax breaks or credits,” said Joe Pennisi, chairman of the group Floridians for Tax Fairness.

Oklahoma voters approved a similar supermajority amendment in 1992, which David Blatt, executive director of the Oklahoma Policy Institute, said exacerbated funding problems.

“Even with one party having a supermajority of seats, as the majority were seeking to solve the problem, a minority of legislators were able to hold out and keep anything from happening,” Blatt said during a conference call with Florida reporters put on by the League of Women Voters.

But supporters of the amendment maintain that if an economic emergency arises, lawmakers would “easily” muster the two-thirds support.

When the proposal was approved by the Legislature this year, Corcoran said the state “should always make it much more difficult to raise taxes than it is to cut them.”

“With the governor (Gov. Rick Scott), we've cut $10 billion in taxes over seven years and are ranked number one for fiscal health in the entire country,” said Corcoran said in a January statement. “This amendment will secure and protect that legacy from future legislatures bent on raising taxes.”

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