An Alternative Plan to Repair Florida's Property Tax Structure

Mayor Tom Truex
Davie, Florida
April 15, 2007



RE: An Alternate Plan to Repair Florida's Property Tax Structure

I have very closely followed the proposals to radically change Florida's property tax structure. As the Mayor of Davie, Florida, I am extremely concerned at the prospect of not having sufficient revenue to fund essential government services. I understand the argument that local governments should not have increased spending as much as they did in the last ten years. But just cutting revenues to local government will not undo commitments made by local government in the last ten years. The cuts in services which local government will be for forced to make under some of the radical proposals will be extremely undesirable for local residents.

However, it is obvious that Florida has serious problems with our current tax structure. Proposals being offered for the most part ignore (1) the cause of the problem, (2) the long term consequences of the cure, and (3) opportunities to achieve benefits to society, apart from tax revenue.

Current levels of property taxation and perceived inequities in the tax burden arise almost entirely from large increases in assessed value, rather than changes in millage rates. However huge increases in the value of one's property is no more a "problem" than is a tremendous success in the performance of any other investment. The problem is not that the property owner is making a big profit--the problem is in the timing of the taxation. The current tax structure levies an ad valorem property tax when the impact is most painful--while the property owner holds the property. For a number of reasons, a better solution is to suppress the impact of property value increases until when a tax is least painful at the time of sale, when the profit is realized.

The detailed version of my plan is available at www.davie.TV; but essentially my plan has three elements:

1. Extend the "Save Our Homes" property tax to benefit ALL real estate. The increase in valuation of all real estate would be capped at the same rate as the current "Save our Homes" benefit.
2. Grant full portability of the "Save our Homes" benefit to all homestead residences.
3. A tax on the profit from real property value increases, deferred until the time the profit is realized at the time of sale. This tax would be further deferred (portable) on the sale and purchase of homestead property. That is, no tax would be due on the profit in the sale of a homestead, if the proceeds are used to purchase a new homestead. The tax would be impressed on the land itself. It would NOT a tax on value, nor a tax on income. Profits to be taxed and any liens imposed would be forward looking. That is, there would be no retroactive impact. Profits accrued before the effective date of the law would not be taxed. Owners, renters, lenders, etc. can anticipate future impacts, and adjust their financial planning accordingly.

Photo: Mayor Tom Truex of Davie, FL

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Congressman Klien has "Town Hall" meeting in Davie

Yesterday a few elected officials and residents met with Congressman Ron Klein at the Davie Police Station.

Photo: From left, Davie Councilman, Marlon Luis; Cooper City Commissioner Elliot Kleiman; Congressman Ron Klien; and Davie Mayor Tom Truex [*click* photo to enlarge]

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VIDEO ONLINE: Davie's 2007 Annual Easter Egg Hunt

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Davie.TV Video Clip

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Mayor Tom Truex 06 (1:15 minutes)

Mayor Tom Truex of Davie, Florida presents a short video of the 2007 Town of Davie Easter Egg Hunt.

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