Local property taxes now lead the sales tax as the largest public revenue source in Florida. Florida local governments collected $20.4 billion in property tax in the 2003 fiscal year. State and local sales tax collections last fiscal year were $18.4 billion.
Property tax revenue fuels the engine of critical local services – funding police and fire protection, public schools, and building code regulation. But both Florida law and Floridians insist that assessment of property for tax purposes be fair and accurate – so that everyone bears their fair share of the cost of public services, no more and no less.
To meet this expectation, property tax administrators face challenging times:
Florida property values are enjoying a period of rapid growth. Property values have been rising by double-digit rates statewide for the last three years. In some areas, market values have risen more than 20 percent per year.
It is especially challenging to determine accurate, uniform values in this time of swift change. To be fair to taxpayers and local governments, tax valuations must be consistent between and within counties, and across all property types.
A series of devastating hurricanes struck the state just as cities, counties, school districts, and special taxing districts were setting their Fiscal Year 2004-05 budgets and property tax rates. The storms hit the offices of county property appraisers and tax collectors just as the work of preparing notices of proposed property tax and preparing for budget hearings was at its peak.
Adapting to the storm
Rising Revenues...
Florida cities, counties, school boards and special taxing districts are seeing increases in property tax revenue, averaging about 8 percent per year over the last two years.
DOR responded to 2004's weather emergencies by assisting Governor Bush in issuing emergency executive orders that provided additional flexibility to local governments in holding public hearings and setting budgets and property-tax rates.
DOR property-tax experts also worked to provide complete information to policymakers during debate on revising property-tax law to respond to weather emergencies.
While DOR has focused on responding to Florida's weather emergencies in recent months, the Department's long-term focus continues to be strengthening the state's property-tax administration system. We are following the same systematic approach as in all other DOR business processes – setting long-term strategic goals, establishing accurate performance measures, monitoring performance, and taking corrective action to ensure that business results achieve expectations.
Stronger analysis, better insights
...And a Strong Market
Continued population growth and a strong market are driving up real estate values across Florida. In 2004, property values grew statewide by 13.6 percent.
Because accurate, fair valuation of property is the bedrock of a sound property tax administration system, DOR has worked hard over the last four years to refine and improve its methodologies for studying property values.
Four years ago, the Department relied primarily on data about property sales to gauge the accuracy of local county property-tax rolls. While sales data give a vast amount of up-to-date information about how the market values property in a county, sales data provide only part of the picture. DOR now uses five methodologies to review the uniformity and accuracy of local property-tax rolls. Each methodology has strong points. By comparing results from five methodologies, DOR provides policymakers and taxpayers with high confidence that property tax assessments are fair and accurate.
Quality on-site appraisals, assistance to local officials
One review method relies on on-site appraisals of selected parcels of property, prepared by an expert DOR appraiser. The Department then compares DOR's results with the values listed for that property on the county tax roll. To ensure that DOR's comparisons are based on the best possible appraisals, DOR has improved the quality of appraisals, making them more consistent and professional.
Developing advanced appraisal technology and methodology can be expensive, especially for smaller counties. To ensure that policymakers and taxpayers enjoy the highest confidence in property tax administration in these counties, DOR has supported these property appraisers as they work to produce fair, accurate tax rolls.
Tangible personal property tax – the other ad valorem tax
Most taxpayers think "real estate" when they consider property tax. Actually, about 15 percent of Florida property-tax revenue comes from taxing tangible personal property – that is, equipment used in businesses, such as display shelves, machinery, and electronics.
For the last three years, Florida legislators have provided DOR with additional staff to assist local property appraisers in accurately and uniformly valuing tangible personal property. Department staff continues to strengthen methodologies for valuing tangible personal property for tax purposes.
