Tax idea a start, part-timers say

By Michael Pollick

As does most everyone, those who have been railing against Florida's uneven system for taxing residential real estate like a tax cut.

But they say the Taxation and Budget Reform Commission's proposal this week to cut 25 percent from property taxes across the board does not come close to solving the huge disparities that have developed between homesteaded and non-homesteaded properties in Florida.

Some go even further, saying the proposal -- to go before voters in November -- is more aimed at addressing government's income rather than its spending habits.

Part-time residents warn that without more significant changes, more and more Northerners will choose to spend their winter in other Sunbelt states. States including Arizona already are lobbying hard for them, noting that both classes of taxpayers operate on a level playing field.

For Sidney Margles of Montreal, who winters in a Deerfield Beach condominium, it comes down to fairness.

Margles, co-founder of Broward Activists for Tax Equity -- one of the dozens of anti-tax activist groups that have sprung up around the state in recent years -- pays $2,800 in property taxes.. His neighbor, in a nearly identical condo in Century Village East, pays $500.

Apply the 25 percent cut and Margles goes to $2,100 while his neighbor goes to $375 -- the same ratio.

"Any kind of tax relief through legislation comes with a question mark," Margles said. "Will it be real relief or paper relief not too different than the insurance relief that the Florida government enacted? On paper it looked good, but in practice it is not that significant."

Doug Guetzloe acknowledges that the commission is on the right track, but agrees in the broad sense with his fellow activists.

"I think it is a huge step forward, when you are dealing with a 25 percent property tax cut," said Guetzloe, chairman and founder of Winter Park-based Ax the Tax. "School taxes have been a continual irritant for a vast majority of seniors here in Florida, so I think this will be a very popular amendment."

The tax cutters say their real agenda remains cutting spending.

"This controls income," Guetzloe said, referring to the commission's referendum. "We've still got the issue of actually capping spending, which is really, I think, the key to the whole formula."

On Monday, the commission agreed to allow voters to decide on what has been promised as the largest tax cut in state history. The plan would remove the state-required portion of property taxes that helps pay for K-12 education.

There would be a 1 percentage point increase in the state's sales tax to make up for some of the cuts, but it is unclear how all of the education budget will be funded.

The cut would apply to all Floridians, including part-time residents and businesses. The measure also would cap annual tax increases for part-time residents and businesses at 5 percent.

Tax activist William Levison, who splits his time between Massachusetts and Florida, agrees with Margles that even with the 25 percent cut, the issue remains an uneven playing field.

"If I am paying twice what my neighbor pays, I will still be paying twice as much as he pays," he said.

The 70,000-member Canadian Snowbird Association is not taking a formal position on the commission's proposal.

"If the plan does in fact provide for a 25 percent cut in property taxes for part-time residents, that would be a big step in the right direction," said Michael MacKenzie, research and communications officer for the Toronto-based group.

The latest proposal's 5 percent cap on non-homesteaded property levies is a moot point given today's moribund real estate market, MacKenzie said, but it would represent a meaningful improvement once Florida's property market takes off again, especially when compared with the 10 percent cap passed by the Florida Legislature this past summer.

"The property taxes that we are paying now are already double," he said. "Ten percent, if you are already paying double, is not that great. Five percent is clearly better than 10 percent."

While Florida is still the largest destination for winter-weary Canadians, MacKenzie is quick to point out that a push is on in Southwestern states to market to Canadians.

"Folks are really concerned about the property tax situation in Florida and they are starting to put their places up for sale and look at other destinations," he said.

"Arizona is the biggest competitor right now."