When the nation's home prices were booming, Florida led the way. Now, with the housing market in a slump, the state is taking the lead in tackling one of the boom's more onerous legacies: sky-high property taxes.
In mid-June, the Florida legislature plans to convene a special session that could pave the way for more than $30 billion in property-tax relief over the next five years. That's by far the largest among the similar tax breaks some states are adopting amid a backlash by disgruntled property owners.
"This is the biggest tax break being considered anywhere since Proposition 13 in California," says Prof. Brunori, referring to the 1978 initiative that radically slashed property taxes in that state.
Florida's legislature is considering various plans that aim not only to cut taxes, but also to change a system that many regard as unfair. Much like California, Florida protects existing homeowners, effectively capping the amount that their property taxes can rise from year to year.
As house prices have more than doubled in Florida over the past five years, the system has shifted the tax burden onto people who don't enjoy the same protection: new homeowners, business owners, real-estate investors, people with second homes and "snowbirds," nonresidents who have vacation homes in the state.
As of 2006, such property owners accounted for about 68% of Florida's property-tax revenues. If all Florida property owners were taxed the same way, those who lack protection under the current system would account for less than 55%, according to data from the state legislature's Joint Select Committee on Property-Tax Reform.
The Wall Street Journal Online