off the charts
BEYOND THE NUMBERS
BEYOND THE NUMBERS
Out-of-State Companies Win, Local Services Lose Under Florida Tax Cut
October 5, 2012 at 1:35 PM
We recently explained that Amendment 4, a package of harmful property tax changes on Florida’s November ballot, would send millions of dollars in property tax breaks out of state instead of using that money locally to pay for police and fire protection, road maintenance, and other public services.
Indeed, some of Amendment 4’s biggest likely beneficiaries would be large corporations headquartered in other states, with out-of-state owners and shareholders. For example:
- Some of the largest property taxpayers in Orange County, which includes Orlando, are The Walt Disney Company (headquartered in California), NBCUniversal (New York), Hilton Hotels & Resorts (Virginia), Lockheed Martin (Maryland), and AT&T/Bell South (Georgia).
- Some of the largest property taxpayers in Hillsborough County, which includes Tampa, are Verizon (headquartered in New York) and Wal-Mart/Sam’s Club (Arkansas).
Amendment 4 would limit the annual growth in the taxable value of properties that are not primary residences to 5 percent. So, in years when market property values rise faster than 5 percent, these sorts of corporations would reap millions of dollars in tax benefits. Real estate values in Florida have plummeted in recent years, but over the 30-year period from 1976 to 2006, they grew by about 8 percent a year.
How much money would Amendment 4 send out of state? No one knows, but a cursory glance at property tax records and some simple math suggest that the amounts would be large.
For example, as of 2011 Walt Disney owned property with an assessed value of $6.45 billion in Orange County. If the value of that property grew by 7 percent a year for two years, by the end of the second year the county would be giving $1.2 million per year (assuming current tax rates) — enough to pay the salaries of 23 police officers at the state’s average annual police salary — in Amendment 4 tax breaks to Disney. NBCUniversal, Hilton, and other out-of-state corporations would get millions more in total property tax breaks, with the benefit accruing to their shareholders and investors, most of whom presumably live outside Florida.
Property taxes are the single largest revenue source for Florida’s local governments, providing 60 percent of counties’ general fund revenues and 42 percent of cities’ revenues. Florida would be far better off keeping that money in the state and using it to sustain local services like police and fire protection and road maintenance, whose funding has fallen severely in recent years due to the housing crash and previous tax cuts. That would be better for the state’s economy and for Floridians’ quality of life.