7

A TAXPAYER AND HIS MONEY

ARE SOON PARTED

"Your final tax bill may contain non-ad valorem assessments which may not be reflected on this notice, such as assessments for roads, fire, garbage, lighting, drainage, water, sewer, or other governmental services and facilities which may be levied by your county, city or special district." appears in small print on the bottom of your tax bill.

Each August, property tax owners receive the Truth in Millage (TRIM) notices, alerting the taxpayer of their proposed property taxes. What they aren't told about are all the other taxes that will be due when they pay these property taxes.

Dale Young, a member of the Brevard County Citizen Budget Review Committee, states, "the other special assessments used to broaden the tax take, such things as special service taxing districts (Viera), stormwater or water management districts, sales tax, local gas taxes, port and inlet assessments, permits, licenses, inspection and user fees are all part of the fragmented tax bite, fragmented to reduce taxpayer awareness and the subsequent howl of indignation."

From 1980 to 1990, Brevard County's population increased 46%. During fiscal years 1981 to 1991, the County's General Property Tax (Ad valorem taxes) went from $23.4 million to $74.8 million amounting to a 220% increase. The Special Assessments (Non-Ad valorem taxes) went from $15,213 to $999,232, a whopping 6,468% increase.

Last fall, Property Appraiser Jim Ford wrote each member of Brevard's state Legislative Delegation. This delegation consists of Brevard's state senators and state representatives: Senators Patsy Kurth and Winston "Bud" Gardner; and Representatives Charles Sembler, Irlo "Bud" Bronson, Frank Stone, Harry Goode, Jr., Dixie Samson and Charlie Roberts. He wrote them, "What we need now is for the Legislature to enact a 'Truth in Taxation provision." If this bill was enacted it would force all the Florida counties to list all non-ad valorem taxes on the advance notice, so that the property owners would know up front what their entire tax bill would be. Senator Patsy Kurth filed a bill to amend Florida Statute 200.069 to do just that. The Senate rejected it, and no representatives wanted to sponsor it for a vote in the House.

A newsletter of the East Merritt Island Homeowner's Association gives an example of the continuing tax bill deception on one property owner's tax bill.

In August of 1991, the homeowner received an ad valorem (property) tax estimate of $353.98, which included taxes for County, schools, and other taxing bodies.

However, when the actual bill came, it also included $212.69 of non-ad valorem taxes (special assessments): recycling pickup ($15), stormwater($36), ambulance (28.69), solid waste disposal ($61) and solid waste collection ($72).

So instead of a tax for $353.98 as the August estimate indicated, the homeowner had a total tax liability of $566.67.

As the Brevard County's spending climbs past $600 million per year and the total debt exceeds $500 million an important question should be considered, who pays for all of this? You do!

The census bureau reports that Brevard County's population increased around 46% from 1980 to 1990 from 272,959 residents to 389,978. Based upon the Brevard County 1991 Comprehensive Annual Financial Report, Brevard County's revenue has greatly surpassed the population trend.

8

HOME IS WHERE THE DOLLAR IS

"Our only hope for controlling the rate of assessments is to get the constitution amended. The Save Our Homes ballot initiative will do this." said Marty Adams of Rockledge, working with the Citizens Coalition for Tax Equity to give Floridians some tax relief on their homes.

During the Depression era thousands of Floridians lost their homes because they were unable to pay their property taxes. With this a fresh memory, the Florida Legislature created the Homestead Exemption law. Under this new legislation homeowners were exempted from paying property taxes on the first $5,000 of assessed value, and at the time the market value of most homes fell below that. As property values skyrocketed in the 1970's the Legislature increased the exemption to $25,000.

However, that has been of little help in a period of rapidly incrasing property values. Homeowners who once paid little or no taxes have been forced to pay tax bills that seemed to increase exorbitantly.

This has resulted in part from high assessed values due to higher selling prices for homes in your neighborhood. Current state law requires the property appraiser to maintain assessments in accordance with increases in market value.

The Save Our Homes petition drive is an effort to take out the uncertainness by limiting the annual rate of increase on the assessed value of a homestead to 3% or less; regardless of what happens in the market place.

The petition drive for this Constitutional Amendment started when Ken Wilkinson, Lee County's Property Appraiser, decided something had to be done to protect Floridians' homes - something similar to what California did when they passed Proposition 13 to protect their homes. Brevard County Property Appraiser Jim Ford took up the effort as Brevard County Coordinator for Save Our Homes and joined hands with Wilkinson to help the taxpayer.

But four years running the Florida Legislature refused to put the Save Our Homes Constitutional Amendment before the public on a general election ballot. It was therefore essential that the people of Florida take action.

In accordance with the State Constitution, with enough signatures Floridians can petition to place a referendum on the ballot at the next general election. It required 8% of the voters who voted in the last election, or in this case, roughly 363,800 people to sign a petition in favor of the assessed valuation limitation. In addition to the required signatures, it also required that ten of the nineteen congressional districts in existence at the time of the last general election also have 8% of the voters in those districts sign the petition. It sounds almost hopeless. But never fear the people of Florida are about to pull it off.

Gene Sterling of Merritt Island joined hands with Property Appraiser Ford and organized small groups of volunteers to gather the necessary signatures for District 11 here in Brevard. They relentlessly persevered by standing for countless hours in all kinds of weather in front of neighborhood stores and shopping centers.

Brevard County should be proud. Over 48,000 petitions were signed. By August 4, 1992 each petition signature, to be counted as legal, has to be verified as that of a registered voter. The office of the Supervisor of Elections Shirley Baccus, should verify the signatures as they are handed in by the volunteers. But as of July 7, 1992 they have only verified around 23,000 of the 48,000. Gene Sterling and his volunteers are hard at work gathering more signatures to be sure the required number of legal signatures is met.

As of July 1992 over 363,800 signatures have been obtained statewide, so the first requirement has been met. And it appears that the necessary ten districts will turn in petitions for the required 8% of voters in order to succeed in getting the referendum on the ballot.

The referendum will appear as HOMESTEAD VALUATION LIMITATION on the general election ballot in November of 1992. Specifically it calls for:

Why should you vote yes on the Homestead Valuation Limitation?

Brevard County Property Appraiser Jim Ford explains, "Save Our Homes is an attempt to control the assessment part of the taxing process. Save Our Homes, if passed, would force government taxation and spending to be focused upon the tax millage rate, and prevent the hidden revenue taxing authorities receive by not reducing tax rates when property assessment increases take place."

In speaking with the Reporter newspaper, Jim Ford gave an example of the expected savings to homeowners if all the taxing authorities had held their spending of property tax revenue to the consumer price index between 1988 and May 1991. The owner of a typical riverfront residential property, with an assessed value of $87,380 in 1987 increasing to $144,510 in 1991, pays approximately $2,500 in property taxes today. Under the Homestead Valuation Limitation the taxpayer would only have to pay approximately $1,870 in taxes for 1991.

Property Appraiser Ford also emphasized that since taxing authorities have not been reducing the tax millage rates to offset these rising assessments, the impact on a taxpayer is greater than it should be.

If you have had unexpected jumps in your home's assessed value and want to eliminate the overburdened taxpayer feeling in the future, then you should support the Homestead Valuation Limitation on November's ballot.

9

THE HAND IS QUICKER

THAN THE EYE

"Agricultural interests are helping stop Florida from collecting millions in back taxes when farmland is developed. Despite its financial crisis, Florida has never made a serious effort to fix widely acknowledged loopholes in the state's agricultural tax exemption. The result: Developers save millions of dollars in property taxes that are routinely collected in most states to help make growth pay its way," according to a special report done by the Orlando Sentinel July 20, 1992.

Encouraging the preservation of farmlands, timberland, and productive agricultural land, Florida passed the first of its kind, greenbelt law in 1959 which ties the property tax of farmland to its agricultural income rather than its market value.

"In high-growth areas that means very low taxes. but the law doesn't specify how much of the land must be cultivated and doesn't mandate that it be farmed for profit," states a July 20, 1992 Associated Press article.

For taxing purposes this land is zoned as "greenbelt" areas. With this classification, property owners are given a lower taxable

property valuation, and thus lower taxes per acre than developed land. "For example in 1990, the Dudas paid $10,200 in property taxes on 2,700 acres of cattle pasture, site of the first phase of Viera," per the Sentinel paper. "If Florida recaptured those back taxes like other states do; then the Dudas would have paid nearly $2 million in additional local property taxes on those 2,700 acres."

Once a property owner begins to develop a parcel, the Property Appraiser removes the greenbelt classification and appraises the property at full value.

According to an Associated Press article, most states collect reimbursement of those back tax subsidies when the land is developed. Florida, which is losing more of its farmland each year than any other state, does not.

"'I think its outrageous,'" said Jim Riggie, project director of the American Farmland Trust, a Washington group dedicated to protecting agricultural lands. "'This should have caused a revolt in Florida by now. Legitimate farmers deserve a greenbelt exemption, but developers do not,'" he said.

Orlando Sentinel research revealed the following:

"Sure, some day the land could be developed. But right now it is cattle pasture. And it should be assessed and taxed as such. Florida's powerful farming lobby has blocked every reform effort," according to the Orlando Sentinel. "Farmers historically have feared that any legislative change might end up gutting the law."

"Instead of changing the law, farm leaders urge property appraisers to crack down on developers and speculators. Critics say that leaves the popularly elected appraisers in the unpleasant position of confronting two of the most powerful groups in Florida: developers and farmers."

"'It doesn't matter about intent; it's a question of whether you can see the cows,'" Lake County Property Appraiser Ed Havill said. "'It doesn't matter if those cows graze on $600-an-acre pasture in Yeehaw Junction or on $1 million-an-acre land near Walt Disney World soon to hold a gift shop,'" he told the Sentinel. The land can still be zoned the preferential greenbelt classification and be assessed lower property taxes.

Unlike Florida, most states have a mechanism to "recapture" back taxes when farmland is developed. But recapture is a political powder keg in Florida, where farmers fear it would limit the size of loans obtained with their land used as collateral.

Brevard County's Property Appraiser has realized the above problem and has been trying to appraise property correctly as it changes from agricultural to developed properties. However he is receiving stiff opposition by some County Officials.

As the Dudas new proposed city of Viera grew east of I-95 and north of Wickham Road, Brevard County's Property Appraiser Jim Ford denied the preferential greenbelt classification for approximately 2,661 acres. Not at all pleased at the prospect of losing the property tax advantage, the Viera Company appealed Ford's decision to the Value Adjustment Board. The Board agreed with the Property Appraiser that the land was now being developed and was subject to full valuation for taxing. But the Viera Company was not satisfied and appealed the valuation of the property to the Value Adjustment Board which had retained special masters to review and recommend any change in value. A concession was recommended in which the full valuation of $27.2 million was reduced by almost $12 million.

When the issue was returned to the Value Adjustment Board for a final decision, they were not obligated to accept the Special Master's recommendation. But they did. By a four to five vote, Commissioners Carol Senne, Sue Schmitt-Kirwan, Karen Andreas, and School Board member Lynn Demetriades did not support Property Appraiser, Jim Ford, but voted to allow the lower land valuation. School Board member Pat Manning, was the lone dissenting vote.

The Property Appraiser feels justified he is right in demanding full valuation of the parcel for the taxpayers of Brevard County. Jim Ford filed a lawsuit to try to prevent the reduction in property valuation, asking the Circuit Court to restore the assessed value his office placed on the property. The case is scheduled to go to trial in 1993.

Meanwhile, because of the actions of the Value Adjustment Board on this parcel, the property taxes for the Viera Company are about $213,789 lower this year, and County coffers are $213,789 poorer.

The following "Fixing Loopholes" came from the Orlando Sentinel's July 20, 1992 special report.

FOOTNOTE: On July 24, 1992, the Orlando Sentinel Editorial Staff ran the following editorial.

FAKE FARMERS SOW HIGH TAXES

Abuse of agricultural tax exemptions is not only unfair, it makes taxes higher for average Floridians. It's time for equity.

Most Florida legislators are all for standing up for the little guy. Unless, of course, that would put them at odds with certain powerful interests.

Such is the case with property taxes. The average Floridian's property tax bill is higher than it should be because legislators continue to let some high-powered companies, developers and land speculators abuse the agricultural tax exemptions.

Florida passed the "Greenbelt" law in 1959. The intent was to help farmers who couldn't afford to keep up their taxes as the value of their land skyrocketed.

But as a recent series in The Orlando Sentinel showed, that exemption has become a quick and easy recipe for a legal tax scam. You take one piece of prime property, toss in a few cows or pine seedlings, add a slick tax attorney, and ta-aaaa -- you've got yourself a farm. Sprinkle the Legislature generously with campaign contributions and this recipe is practically foolproof.

Never mind that the landowner can't tell a Holstein from a Halston, or a pine tree from a Peugeot. Any city slicker can whip up a quick farm and save thousands of dollars in property taxes each year.

But remember, every dime that those fake farmers save on their property taxes costs the average taxpayer more on his bill. It's outrageous that the Legislature still allows the powerful to enjoy such ridiculous - and lucrative - tax breaks.

The exemptions' vagueness makes it difficult for local tax appraisers to crack down on even the most flagrant abusers.

The first step the Legislature can take is to clarify the legal definition of agricultural land. Instead of land that "supports a bona fide commercial venture," the distinction should be that the land's primary use is to generate a profit from legitimate agricultural endeavors.

It also can start automatically revoking agricultural tax exemptions when the landowner gets the zoning changed to a higher status, such as commercial or residential.

Florida also needs to follow the lead of about 30 other states that have instituted recapture taxes. Under that system, when land loses its agricultural status and the owner sells it for a windfall profit, he has to make up the difference in the taxes he would have paid on the land for, say, the last five years, if it had been assessed at it fair market value.

Of course, for the Legislature to yank tax breaks away from high-rolling special interests, it will take a lot of courage and prompting of taxpayers who are tired of shouldering more than their fair share of property taxes.

In the front of each phone book is a listing of each County's State Senators and Representatives, addresses, and phone numbers.

10

GOOD FOR THE GOOSE,

BUT NOT FOR THE GANDER

In recent years many governments have found themselves unable to collect enough revenue from property taxes to feed their grossly expanding budgets. Many have discovered that they can collect fees for services that were once paid for only with tax dollars.

One of the largest sources are impact fees charged on all new construction. The collected funds are to be spent offsetting the costs of increased demand by increased population on services such as schools, road repairs, and police protection.

In unincorporated areas of Brevard County each new house built pays an impact fee of $1,106.53 which is often thrown into the cost of construction by the builder. As of July 1992, this impact fee consists of:

The owners of each new home and office building built in Brevard County are required to pay impact fees, unless exempted by high County Officials.

According to research done by Carol Hayes of The Reporter newspaper, the County had a peculiar financing arrangement on the Government complex with the developer, Central Brevard Development, Inc., a subsidiary of A. Duda & Sons, Inc. Apparently it exempts them and the owner from impact fees unless the County chooses not to renew its annual lease.

County Attorney Bob Guthrie waived over $360,586 of impact fees that were due prior to the County moving into the five new Government Center buildings constructed in Viera.

Bear in mind that these expensive buildings do not belong to the County and are only leased.

In a July 9, 1992 article in The Reporter newspaper Carol Hayes wrote, "The County Commission agreed last month to reimburse the Viera Co. up to $1.3 million for construction of a road to the proposed new Sports Complex. The reimbursement comes in the form of an impact fee credit for the extension of Fiske Blvd. through Viera West south to St. Johns Street."

During negotiations for a Sports Complex for the Florida Marlins professional baseball team spring training facility, it was widely reported that the Viera Company would provide roads, sewer and water, along with a donation of 74 acres of land.

The credit, however, amounts to a waiver of $1.3 million in impact fees, which would otherwise be available for improvements to roads that will be adversely impacted by the stadium and the Viera Development.

County Commissioners approved the credit although the Fiske Extension has no priority designation. It is not included in the County Transportation Capital Improvements Program. It is not identified as a County collector or arterial road. And it is not included in the Viera Development of Regional Impact (D.R.I.).

Viera agreed to extend Fiske Boulevard only after it was tied into negotiations for the Marlins' Sports Complex and their share of road construction costs was limited to 30%.

An Inter Office (County) Memo dated December 18, 1991 described Viera West as "a destination...not a community where individuals drive thru to go somewhere else." The Fiske Extension does not meet County criteria as a transportation facility "associated with the arterial and collector network." The memo raises additional questions: