Transcript Slide 1

Gregory S. Brown, CFA
Santa Rosa County
Property Appraiser
Web Presentation
Any of the examples in this presentation do
not take into account any exemptions other
than homestead (so the examples do not
include
seniors,
veterans,
widows,
disability, etc.) or any taxes or nonhomestead special assessments.
Affects of
Amendment One (A1)
Amendment One is a constitutional
amendment passed by the citizens of the
State of Florida. Amendment One dealt
with only four initiatives.
Four Elements of
Amendment One (A1)

Doubles the Homestead Exemption an additional
$25,000 for property assessed above $50,000. Does not
apply to School taxes.

Offers portability of accrued benefits (up to $500,000)
under the Save Our Homes cap.

Creates capping of non-Homestead assessments at 10%
each year (similar to Save Our Homes capping).

Provides a $25,000 Exemption on Tangible Personal
Property.
Double Homestead
$100K
No further Exemptions
Assessed Value
$75K
Second Homestead Exemption from County,
City and NWFL Water Management taxes.
$50K
No Exemption for Homestead
$25K
Homestead Exemption from County, School,
City and NWFL Water Management taxes.
$0
Amendment One Continued…
Amendment One is not a revenue capping
constitutional amendment. Any capping of
taxing authorities revenues was passed by
the Florida Legislature in their special
session in 2007. Primarily, their action
limits government revenue increases to new
construction and Florida’s personal income
growth only.
Affects of Amendment One (A1)
The Additional $25,000 Homestead Exemption
only affects the portion of your ad valorem taxes
dealing with county, city or any agency
levying a millage rate against your
property value (ad valorem).
The Additional $25,000 Homestead Exemption
does not affect the school tax portion of your
proposed taxes.
Affects of Amendment One (A1)
Continued…
To calculate the tax savings for county residents with
no 3% assessment increase for Save Our Homes:
$ 25,000
x .0061403
$ 153.5075
Exemption amount
Proposed Millage Rate*
Tax Savings due to A1
* Millage Rate is for County and Northwest Florida Water Management
(NWFWM) and does not include school taxes.
Affects of Amendment One (A1)
Continued…
If you have owned your home for several
years, you may have accrued a Save Our
Homes (SOH) differential. This is the
difference between your market value and
your assessed value. The SOH Amendment
limits the increase in your assessed value to
no more than 3% per year or the consumer
price index, whichever is less.
Example of SOH Differential
Market Value
Assessed Value
SOH Diff.
2005
$100,000
$100,000
$
0
2006
$150,000
$103,000
$ 47,000
2007
$150,000
$106,090
$ 43,910
2008
$130,000
$109,273
$ 20,727
The assessed value cannot increase more than 3% per year even though
the market value decreased. As long as there is a difference
between assessed value and market value, the assessed value will
increase under the current state rule.
Affects of Amendment One (A1)
Continued…
This year Chris Jones (Escambia County
Property Appraiser) and I tried to persuade
the Chairman of the Senate Finance and Tax
Committee, Senator Haridopolos to pursue
changing the rule requiring the 3% increase
in the assessed amount for properties with a
SOH differential. We received no response
from the Senator concerning this issue.
Affects of Amendment One (A1)
Continued…
We, in essence, asked the assessed
value to remain the same if the
market value stayed the same. Or, if
the market value decreased, then the
assessed value should decrease by the
same percentage.
Letter to Senator Haridopolos
from our Attorney, Tom Findley
March 25, 2008
Senator Mike Haridopolos
Florida Senate, District 26
322 Senate Office Building
404 South Monroe Street
Tallahassee, Florida 32399-1100
Dear Senator Haridopolos:
Thank you for meeting with Chris Jones and Greg Brown last week. Enclosed is a document that
reflects their suggestions regarding the "recapture rule" and the Department of Revenue's ability to
decline homestead exemptions when they dispute a property appraiser's submitted tax roll. If we can
be of further assistance, please do not hesitate to call on us.
Sincerely,
Thomas M. Findley
TMF\cc
Enclosure
cc: Mr. Chris Jones, Property Appraiser of Escambia County
Mr. Greg Brown, Property Appraiser of Santa Rosa County
J. Elliott Messer, Esq.
Bob L. Harris, Esq.
A. REPEAL OF DOR RECAPTURE RULE
III. Suggested Statutory Revision:
I. Current Status:
Department of Revenue Rule 12D-8.0062 currently provides that, even Add the underlined language:
in years in which the fair market value declines, the assessed value of
193.155(1). Homestead assessments.-Homestead property shall be
real property for ad valorem property tax purposes must be increased if
assessed at just value as of January 1, 1994. Property receiving the
the assessed value for Save Our Homes (SOH) purposes is less than
homestead exemption after January 1, 1994, shall be assessed at just
fair market value. The rule specifically provides:
value as of January 1 of the year in which the property receives the
exemption.
12D-8.0062 Assessments; Homestead; Limitations.
(1) Beginning in 1995, or the year following the year the property
...
receives homestead exemption, whichever is later, the property shall
(5) Where the current year just value of an individual property
be reassessed annually on January 1. Any change resulting from
exceeds the prior year assessed value, the property appraiser
such reassessment shall not exceed the lower of the following:
is required to increase the prior year’s assessed value by the
(a) Three percent of the assessed value of the property for the prior
lower of:
year; or
(a) Three percent; or
(b) The percentage change in the Consumer Price Index for All Urban
(b) The percentage change in the Consumer Price Index (CPI) for all
Consumers, U.S. City Average, all items 1967=100, or successor
urban consumers, U.S. City Average, all items 1967=100, or
reports for the preceding calendar year as initially reported by the
successor reports for the preceding calendar year as initially
United States Department of labor, Bureau of Labor Statistics.
reported by the United States Department of Labor, Bureau of
Labor Statistics.
If the just value has decreased from the prior year, the
(6) If the percentage change in the Consumer Price Index (CPI) referenced in
assessed value shall be decreased by the same
paragraph (5)(b) is negative, then the assessed value shall be the prior
percentage as the percentage decrease in just
year’s assessed value decreased by that percentage.
value. If there is no change in just value from a
...
prior year, then there shall be no increase in
II. Issue:
assessed value.
The rule states that the property appraiser is “required” to increase the
assessed value, even when the fair market value declines. Although
subsection (6) of the rule allows for a reduction in the assessed value if
the CPI is negative, it does not allow necessarily for a reduction in
assessed value if the fair market value declines.
In our view, the rule requiring an increase in assessed value, even in a
declining real estate market, is not supported by the statute. Section
193.155(1) states only that any “change” resulting from a
reassessment “shall not exceed” either 3% of the assessed value or the
CPI, whichever is less. Yet, it does not “require” an increase of 3% in a
declining market.
The expectation of the public is that Amendment One and lower
property values will equate to lower tax bills. Yet, with the “recapture”
rule of the Department of Revenue, those potential tax savings stand to
be wiped out or greatly reduced. Accordingly, we suggest the following
statutory revision to avoid any misunderstanding.
Enclosure to the letter from Tom
Findley to Senator Haridopolos
Affects of Amendment One (A1)
Continued…
Therefore, because of the 3% increase in the
homesteaded properties assessed value
with a SOH differential, your tax relief may
be somewhat less than the $153.51.
Affects of Amendment One (A1)
Continued…
The Santa Rosa County School Board’s tax
portion increased this year on the Required
Local Effort (RLE) as provided by the State
of Florida. The state sets the RLE millage
rate. Their millage rate increased by .297
mills. This will have an affect on your
savings due to Amendment One if you have a
SOH differential.
Affects of Amendment One (A1)
Continued…
Coupled with a higher millage rate on the
state mandated School’s Required Local
Effort and the possible 3% increase in
your assessed value due to the SOH
rule, your expected savings will be less
or you could possibly see a tax increase.
Affects of Amendment One (A1)
Continued…
The following slides are intended to
graphically display the affects of the
increase in assessed value by the state’s rule
and higher school millage rate:
Affects of Amendment One (A1)
Continued…
The next slide is a scale of the
affects of increasing a homestead
property’s assessed value by 3%
with the additional $25,000
homestead exemption provided by
Amendment One.
Estim ated Annual County Tax Savings
(Includes Am endm ent 1 exem ption & 3% SOH Recapture)
$160
$138.67
$140
$134.10
$121.91
$115.81
$120
$97.52
$100
$79.24
$80
$60.95
$60
$40
$20
$0.00
$0
$50K
$60K
$70K
$75K
$100K
Assessed Value
$200K
$300K
$400K
Affects of Amendment One (A1)
Continued…
The next slide illustrates the affects of
increasing the millage rate for the Schools’
Required Local Effort as mandated by the
state.
Tax Increase mainly due to State Required Local School Board millage increase of .297 mills
(includes 3% SOH recapture)
$250
$200.42
$200
$148.46
$150
$96.49
$100
$44.54
$50
$18.56
$23.75
$28.95
$31.55
$0
$50K
$60K
$70K
$75K
$100K
Assessed Value
$200K
$300K
$400K
Affects of Amendment One (A1)
Continued…
The next slide illustrates the combination of
the increase in the school millage rate and
the 3% increase in assessed value on
homesteaded properties with a SOH
differential.
$150
$108.15
$92.96
$100
$90.55
$37.20
$50
$20.17
$0
$50K
-$18.56
$60K
$70K
$75K
$ 10 0 K
$200K
$300K
$400K
Assessed Value
-$50
-$50.21
-$100
Blue depicts a tax decrease.
Red depicts a tax increase.
-$150
-$120.59
Therefore, if your assessed value was between
$50,000 and $228,965, then you
received a proportional tax decrease. If
your home’s value was outside of these
assessed values then you received a tax
increase due to the factors previously
discussed.
Affects of Amendment One (A1)
Continued…
The next slide indicates the amount of
savings you should expect if your home’s
market and assessed value was the same
as last year.
Savings if no increase in Assessed Value from 2007 to 2008
$160
$144.96
$141.99
$139.02
$140
$137.53
$130.11
$120
$100.41
$100
$80
$70.71
$60
$41.01
$40
$20
$0
$50K
$60K
$70K
$75K
$100K
Assessed Value
$200K
$300K
$400K
The following table is an accumulation of
the combined affects of the SOH 3%
recapture rule, Amendment One, and
the increase in the school’s Local
Required Effort (LRE) on the proposed
taxes for 2008.
Affects of Amendment One (A1)
Continued…
The following slides are an example of the
increase in assessed value due to SOH,
should you have a SOH differential
accumulation over several years and the
increase of the school’s millage rate.
Example of the affects of increased
school’s RLE and 3% increase in SOH
with Amendment One.
2007 Market Value
2007 Assessed Value
$ 165,901
$ 130,411
2008 Market Value
2008 Assessed Value
$ 165,888
$ 134,323
Change in assessed value of $ 3,912 was the 3%
increase in SOH by state rule, even though
the market value stayed almost the same.
Affects of Amendment One
The following taxable values are based on the
previous slide’s information:
2007 Taxable Value
$ 105,411
2008 Taxable Value
County
School
Other
$ 84,323
$ 109,323
$ 84,323
Example Continued…
Even though the market value slightly
decreased, the assessed value increased due
to the 3% requirement on the SOH
amendment as required by rule from the
State of Florida.
2007 Assessed Value
$ 130,411
Increase in SOH 3% recapture
$
2008 Assessed Value
$ 134,323
3,912
County & NWFWM taxable value $ 84,323
School taxable value
$ 109,323
Net Savings
Savings Amendment One
$ 152.38
($ 25,000 x .0060953 = $ 152.38)
3% Increase in SOH
-$ 53.05
($ 3,912 x .00135603 = $ 53.05)
School Millage Increase
-$ 32.47
($ 109,323 x .000297 = $ 32.47)
2008 Net overall Savings
$ 66.86
Net Affect of Changes
The combined affects of Amendment One,
3% increase in SOH assessed value, and the
increase in School millage rate results in a
net savings on this example of:
$ 66.86
And not $153.51
Affects of Amendment One (A1)
Continued…
Should you have any questions concerning the
affects of Amendment One or the Save Our
Homes amendment, please contact our
office.
End