Haven't we been here before?
The signs are there: an economic bubble that has driven the economy bursts, creating financial uncertainty, and an executive says it's time to return tax money to the citizens. Could be 2001 on the federal level all over again. Instead, it's Florida 2007.
To be fair to Charlie Crist (not that I'm much in the mood for it these days), the main discussion in the 2006 Governor's race was not whether to cut property taxes, but by how much. But that was the end of the housing boom and the bubble was just starting to deflate. Realtors as well as homeowners sensed that there was a problem, but called for tax cuts to make their houses easier to sell.
It didn't work, mostly because houses down here were grossly overvalued (as happens during a bubble) and, as has been the case nationwide, banks and mortgage lenders overreached and gave loans they shouldn't have (shades of the S&L crisis of my youth). It's the classic free market economy problem--too much supply and not enough demand forces prices lower, and the people in over their heads have no options left but to walk away from their debts.
But now realtors are changing their stories. They're afraid that tax cuts, far from encouraging home buyers, will instead discourage them. Why?
"A big question on people's minds is what will happen in terms of public services and does this mean schools will have less money, and what about public hospitals?" said Barry Rothman, sales associate with Lang Realty in Boca Raton. "Are we going to get even less service for our tax dollars?"Who knew that real estate agents were socialists at heart? (I say that with great affection for socialism.) It makes sense, really. Real estate agents sell more than a house; they sell communities, and a large part of those communities is the infrastructure. Roads, schools, police and fire protection, hospitals--they're all part of the deal, and they're all funded at least in part by tax dollars. Taxes are the dues we pay for a stable society, which is why the "tax=bad" position held by groups like the Club for Growth are so ludicrous. (Yes, I am aware it is possible to choke off an economy with too much taxation, but we're nowhere near that, no matter what Grover "drown government in a bathtub" Norquist likes to say.)
In 2004, when Howard Dean was running for President, and he talked about the Bush tax cuts in 2001-3, he asked people if they'd seen any real decrease in their expenses. Sure, they'd gotten a check from the federal government, but had their local and state taxes gone up to meet the cuts in federal funding? Were they paying more in property taxes, in tuition, etc? Or had they lost services, or both? And the answer was always an unqualified yes. Same thing is happening here.
West Park is considering a 50 percent hike in the fire fee and a 40 percent increase in the garbage fee. Other cities also are weighing drastic actions to cover shortfalls.Money's got to come from somewhere.
Tamarac is laying off 26 employees and may reduce the community bus service for seniors. Pembroke Pines is considering pulling the plug on some preschool programs, senior bus service and the mounted patrol while doubling its fire-rescue fee.
Boynton Beach is eyeing a water tax and Delray Beach may leave five police officer positions vacant and increase business taxes to raise revenue.
Broward County is looking to increase the cost of going to parks on weekends, returning overdue library books and licensing pets. Palm Beach County plans to raise bus fares.
The problem here wasn't so much that property taxes were too high--it was that property values were too high because of the bubble. That's correcting itself now. Taxes will fall back into line as well.