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Highlands Today

Penny Wise

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John Dyce

Published: January 20, 2008

Why aren't cities and counties screaming, hollering and lobbying against Amendment One, an amendment which if passed would severely cut its revenue? Is it because they are afraid to take on the state? Perhaps they believe they can easily operate with less money? Or maybe they think they have no credibility with the voters? Doubtful on all counts. The most logical conclusion is that if Amendment One passes, local governments will continue to get the revenue they need to provide the services we are used to and demand.

How can they receive adequate tax revenue when more property is exempt from taxes? By increasing the millage. In other words, the property that remains taxable will be taxed at a higher rate. That makes the claim that the average homeowner will see a decrease of $200 per year more than misleading. It is like if a store gave you a 10 percent discount card and then raised prices.

For homeowners, the biggest issue is not taxes per se; it is property values. The home that was worth $200,000 last year is now worth $180,000 since prices have dropped 10 percent. While we obsessed about the nickels and dimes of taxes, we lost $20,000 on our investment, our net worth, our nest egg.

Regardless of Amendment One's meager benefits, I will vote "No" because I think its major effect will be to lower real estate values and further diminish my investment. For you see, when the millage rate goes up, monthly payments for new buyers increase. That's a problem because the likely cause for the decline in the real estate market is that monthly payments have reached the point where buyers either can't or won't take them on.

Amendment One, by increasing monthly payments (due to higher millage rates), takes more buyers out of the market. When that happens, it becomes a buyer's market and prices fall in order to make monthly payments affordable.

Among the reasons monthly payments for new buyers are unaffordable are Save Our Homes (SOH) fallout and property insurance premium escalation. Not much will be done about insurance, in the short run at least, so that leaves us with two options to make homes more affordable: lower the taxes for new buyers or lower the home prices. While it goes against our DNA, we property owners should be begging our lawmakers to raise our taxes and lower those for new buyers, again, because high home values are more beneficial to our bottom line than low taxes.

The people we elect are pretty smart and they know that SOH has outlived its usefulness. That's why, if you analyze it carefully, the first version of the tax amendment essentially ended SOH by offering homeowners a choice loaded towards doing away with it. Phasing out SOH means taxes would be raised on one group and lowered on the other. But raising taxes, even if revenue neutral, is political suicide for our elected officials and being reelected trumps any other consideration for politicians. So while they tried to end SOH they didn't tell us, hiding that fact with confusing language. A judge threw out the proposed amendment precisely because most people would not realize that SOH was in jeopardy.

Vote "NO" and let them work a little harder. Who knows, maybe they will have the courage to get it right the next time.

John Dyce
Lorida

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