Posted: 10 Jul 2010 03:55 PM PDT

As the city struggles for money following with two years of sharply dropping property values, its tax base is further eroded by a 2008 voter-approved constitutional amendment that doubled the homestead exemption on many properties.

What might have made sense when home values were still high at the tail end of the housing boom is adding to the city's pain this year as city officials work to cut $4.7 million in spending from the budget for the year that begins Oct. 1.

Commissioners are considering four-day work weeks, pension cuts, a reduction in Palm Beach County Sheriff's Office staffing and new sources of revenue, such as charging for downtown parking and red-light cameras.

During the past three years, the city's tax base has dropped a whopping 46 percent, from a building-boom peak of $2.09 billion in 2007 to $1.13 billion this year.

About $76 million of that drop can be blamed on the additional homestead exemption, according to the county property appraiser's office. The effect of the extra exemption on the city's tax base was even larger last year — $101 million — when property values were higher.

"The extra exemption definitely had an effect on our tax base," Commissioner Suzanne Mulvehill said. "We intend to do more with less, just as our residents are doing."

The extra exemption came as part of a tax-cut package, known as Amendment 1, that was championed by Gov. Charlie Crist and was approved by Florida voters in January 2008. The extra exemption reduces the taxable value of property this year by $90.7 billion statewide.

Amendment 1's supporters said the extra exemption and other provisions would stimulate the economy and ease the burden on property owners whose tax bills soared during the boom.

But Mayor Rene Varela said he disagrees with initiatives such as Amendment 1 that prove popular for state politicians at the expense of local governments.

"There's no way I can agree with a legislature that imposes its will without offering alternatives," Varela said.

Jamie Titcomb, executive director of the Palm Beach County League of Cities, said the extra exemption means that owners of homes with low values — the median assessed value of a Lake Worth home is $69,419 — pay little in city taxes. But those same owners tend to demand a large share of services such as police and fire-rescue protection.

"Some of the areas that generate the least amount of revenue to pay for urban services generate some of the greatest demand," Titcomb said. "Other revenue sources pick up the slack for it."

Commissioner Scott Maxwell said Lake Worth simply needs to address its sagging tax base.

"If we don't bring back our neighborhoods and address crime and the blight, where do we go?"

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Property tax relief proposals wither in Albany

Posted: 11 Jul 2010 02:54 AM PDT

ALBANY — There is no relief in store for beleaguered New York property owners after state leaders failed this year to produce a plan to control the highest taxes in the country.

That's disheartening to taxpayers such as Judith Gustafson.

The Marbletown, Ulster County, resident and retiree, who is the chairwoman of a property-tax reform task force, said it was "extremely disappointing" that a year spent lobbying for lower or stable taxes has resulted in zero action.

"The momentum is not there except in pockets of the Legislature," Gustafson said. "We will continue to push for this, but whether it's going to happen in the next budget is uncertain, too."

Gustafson, who pays about $8,000 a year in school and local property taxes, supports the "circuit-breaker" solution, which would tie property taxes to a household's income.

The state's property tax burden is usually ranked the highest in the country each year, even as home values plummet during the recession.

But despite multiple plans to solve the problem, and expressed support from voters and politicians for some form of property-tax relief during a historic economic downturn, the Legislature failed to approve any of them this legislative session.

The problem, believes E.J. McMahon of the Empire Center for New York State Policy, is that no one in Albany can agree on a specific plan.

"The main reason is there's no broad agreement on what property-tax relief actually means, and there's no real interest in getting it done," McMahon said.

McMahon said a fair solution would be to cap property-tax increases annually.

"A tax cap is the one form of tax relief that goes to everyone," he said. "Real tax relief requires real expenditure restraint."

Groups such as Unshackle Upstate, which seeks a more business-friendly economic climate for New York, have called for a 2.5 percent annual cap on property-tax increases. Voters in local elections would be allowed to lift the cap temporarily in order to pay for a project.

"Unfortunately, no one has picked it up," said Brian Sampson, executive director of the group.

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Property tax breaks on farm land shifts

Posted: 10 Jul 2010 03:08 PM PDT

Madison, Wis. (AP) -- A new report says a state law that provides property tax breaks on farm land shifted nearly $5 million in liability to other taxpayers.

Under Wisconsin's use-value law, property taxes on agricultural land are based on the land's ability to produce farm income rather than market value. Some complain developers take advantage of the law by growing crops on land zoned for non-farming purposes.

The state Legislative Audit Bureau studied the law's effects in 14 Wisconsin municipalities in 2009.

The bureau found the total market value of land defined as agricultural under the use-value law but zoned for non-farming was $251 million. It was assessed at only $1.6 million under use-value.

If the land had been assessed at market value, the owners would have been liable for $4.7 million more in property taxes. All other property owners' tax liability would have been reduced by the same amount. Instead they had to make up the difference.

The report is available at http://www.legis.state.wi.us/lab/reports/10-usevalueassessment_ltr.pdf.

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Somerton property tax rate goes up 5 cents

Posted: 10 Jul 2010 05:23 PM PDT

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