The Effect of Recent Changes in Law on The Notice of Proposed Property Taxes

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The Effect of Recent Changes in Law on The Notice of Proposed Property Taxes

Submitted to:
The President of the Senate and The Speaker of the House
January 30, 2009


The Department of Revenue is required by section 15, Chapter 2008-173, Laws of Florida, to submit this report to the President of the Senate and Speaker of the House of Representatives by February 1, 2009 on the effect of recent law changes on the Notice of Proposed Property Taxes as specified in s. 200.069, Florida Statutes. The report examines the consistency, completeness, and accuracy of the information provided to taxpayers in light of recently enacted exemptions from property tax and assessment increase limitations. The report also examines the effect of these exemptions and assessment increase limitations on school and nonschool taxable value and on the limitations on maximum millage levies of counties, municipalities and independent special districts. Major findings in the report are:

•A key purpose of the Truth in Millage (TRIM) provisions, first enacted in 1980, was to separate the impact of the property appraiser’s determination of taxable value and the local government’s decision to raise property tax revenues sufficient to fund its budget. This provided the taxpayer with sufficient information to distinguish between the effect on his or her tax bill of any change in value and the impact of each taxing authority’s budget and millage decisions. Information was also provided to give taxpayers the opportunity to have input into both processes.

•The complexity of Florida’s property tax structure has increased considerably since the Truth in Millage process was first enacted in 1980. A number of local option exemptions have been created, such as the low-income senior exemption and the economic development exemptions, resulting in different taxable values for different local governments. The Save Our Homes assessment increase limitation took effect in 1995. Additional provisions were added by Amendment 1 in 2008 which affect taxing authorities differently.

•The Department of Revenue suggests that the Notice of Proposed Property Taxes be expanded to two pages -- one page for valuation and exemption information, and one page for information on local government budget and millage proposals. This expansion allows the valuation page to display more complete information on the valuation details impacting taxes levied by each taxing authority.

•The maximum millage requirements, first enacted in 2007, have had a significant impact on non-school property taxation. For the 32 years prior to 2007, the average percentage increase in non-school property taxes was 10.2 percent. However, the average annual change has been negative 3.0 percent for the two years (2007 and 2008) the maximum millage requirements have been in place.

•Of the 585 local governments subject to the maximum millage requirements in 2008, 328 levied a tax rate requiring only a majority vote, 207 levied a tax rate requiring a two-thirds vote and 50 levied a tax rate requiring a unanimous vote.

•Based on the Department of Revenue’s experience administering a number of recently enacted property tax-related programs, 15 administrative issues have been identified that the legislature may want to consider in the upcoming session.