EDITORIAL: Cheers to tax fix

May 9, 2008

Bradenton Herald--May 09, 2008

One bill passed by the Legislature this past session that did not garner big headlines but is big among some business owners will finally right a wrong.

That wrong is the onerous practice of taxing properties based on potential value, not actual use. The bill puts tight restrictions on that method of assessing properties.

We can hear the cheers coming from the small mom-and-pop motels out on Anna Maria Island and other properties who have been unfairly burdened – punished, really – merely by their close proximity to expensive condos, luxury hotels and other high-end properties.

The concept behind this “highest and best use” formula in the property-tax code remains baffling. Taxing property based on potential use and not actual use is an abuse of power. By that line of reasoning, Old Florida waterfront neighborhoods next to million-dollar condos would be taxed into extinction.

Anna Maria Island motel owners felt that tax pain. A Herald report last year detailed one such property owner’s skyrocketing taxes, which had soared from $9,000 to $70,000 from 2000-2007. Another was forced to raise room rates from $60 to $110, with the entire $50 difference going to the tax man. Motels were losing business as longtime guests accustomed to inexpensive stays opted to take vacations elsewhere.


The bill, which Gov. Charlie Crist is expected to sign, requires tax appraisers to assess properties based on income generated instead of potential. Appraisers must also weigh the “legally permissible use of the property” when applying the highest and best factors – which involves whether the property would require different zoning, permits and new roads before being converted into a more valuable property.

Those new rules should level out the playing field for small-business owners.

Another promising component of the bill puts two citizens on the boards that hear appeals of property assessments, taking two spots held by elected officials – one county commissioner and one school board member. Two commissioners and one school board representative would remain on the appeals panel. With that change, appeals will not just be heard by officials who spend our tax money and who may want to keep that gravy train running strong. Citizen members will provide some balance to the process.

The Legislature embraced this overdue correction to our tax laws unanimously, 39-0 in the Senate and 116-0 in the House.

The impact to government coffers remains to be determined, but with property values dropping anyway, that might be minimal. And it won’t happen this year. The law won’t go into effect until September, and new assessments will not impact this year’s tax bills.

This is one issue the Legislature got right this past session.