- November 23, 2024
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Some say it will bring thousands of jobs to Florida. Others say it will kill the state’s economy. As elections draw nearer, Amendment 4 remains shrouded in debate.
If passed, the amendment stops the assessed value of homestead properties from rising if their fair market values decrease. It would also grant first-time homesteaders within the last three years a 50% deduction from their property taxes, a cut that would be gradually phased out by 20% reductions over three years.
Finally, the amendment would reduce the limit on annual assessment increases to non-homestead properties from 10% to 5%.
Some, like Florida TaxWatch, estimate that this would create upwards of 20,000 jobs over 10 years, because the tax cut for business owners would entice expansion and creation of new ventures.
“It’s not quite as beautiful as it pretends to be,” Cragin Mosteller, of the Florida Association of Counties, told the Flagler County Board of County Commissioners Monday at its regular meeting.
Mosteller said this bill would be unfair to full-time residents of Florida because it gives non-homestead properties a break from taxes — but when there’s a tax cut, someone has to pay to make up the lost revenue.
Homeowners would be paying this difference, she said, so the bill would shift the tax burden from snowbirds and businesses to homesteaded residents of Florida, and local governments would have to account for these losses by finding more cuts in their budgets.
In a 2006 report, Standard & Poor expressed some concerns about such caps.
“There is a direct correlation between economic growth and a government’s ability to benefit from that taxation,” the report read. “ … If appraisal caps are put in place, municipalities won’t be able to offer special incentives to keep existing businesses or attract new ones, as they will be constrained by their revenue sources.”
But proponents of the bill argue that since the amendment will reward businesses, the economy will actually pick up, spreading money through the rest of the community.
The same Florida TaxWatch study that cited job creation also said the state’s gross domestic product would increase by approximately $1.1 billion with the passage of this bill, with statewide personal income increasing by more than $5.3 billion.
Jerry D. Parrish, the chief economist for the organization and the executive director for the Center for Competitive Florida, authored the study.
“The proposed Amendment 4 would reduce uncertainty for both personal and business investment,” Parrish said in a statement. “When individuals and businesses can better estimate their future costs … they are more likely to invest.”
Because of that, Parrish said, investments in residential and commercial properties will increase if the bill is passed. Florida TaxWatch predicts an increase in home sales between 320,000 and 384,000 in Florida within 10 years if the amendment is passed.
The Flagler County Chamber of Commerce & Affiliates is choosing to remain neutral on the topic and declined to comment on Amendment 4, said Doug Baxter, its president.
The Palm Coast Business Assistance Center also declined to comment on the issue, said Joe Roy, the center’s director.
While the County Commission is unable to lobby for or against a particular bill, it does include a link to a video Mosteller presented at the meeting on its website.
