Legislative Matter

Miami-Dade Legislative Item
File Number: 102478

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Clerk's Official Copy

File Number: 102478

File Type: Resolution

Status: Adopted

Version: 0

Reference: R-1055-10

Control: Board of County Commissioners

File Name: LOW AND MIDDLE INCOME SENIOR FREEZE

Introduced: 10/15/2010

Requester: NONE

Cost:

Final Action: 10/19/2010

Agenda Date: 10/19/2010

Agenda Item Number: 11A5SUBSTITUTE

Notes:

sub.to 102418

Title:

RESOLUTION URGING THE FLORIDA LEGISLATURE TO PASS A JOINT RESOLUTION THAT WOULD PROPOSE A CONSTITUTIONAL AMENDMENT TO PROVIDE FOR A LOCAL OPTION TO PROHIBIT INCREASES IN THE TOTAL PROPERTY TAX BILL OF HOMESTEAD PROPERTY OF LOW AND MIDDLE INCOME SENIOR CITIZENS [SEE ORIGINAL ITEMS UNDER NOS. 102418 & 102462]

Indexes:

NONE

Sponsors:	Jose "Pepe" Diaz, Prime Sponsor
	Rebeca Sosa, Co-Sponsor

Sunset Provision: No

Effective Date:

Expiration Date:

Registered Lobbyist:

None Listed

Legislative History
Acting Body	Date	Agenda Item	Action	Sent To	Due Date	Returned	Pass/Fail

Board of County Commissioners	10/19/2010	11A5 SUBSTITUTE	Adopted				P
REPORT:	Commissioner Diaz noted this resolution urged Tallahassee to provide some relief for seniors in the lower middle income bracket by implementing a ceiling on their property taxes. He noted several studies revealed that middle income seniors who retired to a fixed or lower income had suffered the most by the current economic downturn and by substantial cost of living increases. Studies also revealed the average annual income of retirees living in Florida was between $50,000 and $80,000, and in the Miami-Dade County was $50,000. Commissioner Diaz noted Commissioner Martinez sponsored a similar proposal that targeted a lower income bracket of $25,000 or less; however, he wanted to target the lower middle income level of $50,000 or less. Commissioner Sorenson agreed this was a problem, but did not agree the solution was changing the County’s tax structure or tweaking the Save Our Homes program, because often that resulted in unintended consequences. She said she believed Commissioner Barreiro’s proposal was the best solution because it would specifically target tax increases in a given year and use a relief fund to cover any increases in the property tax bill and provide assistant to those seniors living on a fixed income, particularly in years when their income was not indexed to inflation. She pointed out that social security recipients had not received an increase in the past two years. Commissioner Sorenson said she believed this proposal would address the issue at the County level rather than legislate it at the State level, and would protect the County’s Home Rule Charter. Commissioner Gimenez said he agreed with the concept, but thought the thresholds were too low and some eligibility requirements should be set. He suggested that since $200,000 to $250,000 was considered upper income level by the current Administration, the thresholds in this resolution should be set higher than $50,000. He pointed out that had it not been for the “Save Our Homes” program, many more individuals would have lost their homes. Commissioner Diaz noted the primary objective was to provide some peace of mind to seniors living on a fixed income and faced with increased property taxes due to uncontrolled movements in the real estate market. He pointed out that several pension funds plummeted drastically because of the economy’s downturn and the burst in the real estate market. He also pointed out the language in the last sentence on handwritten page 5 addressed eligibility thresholds, which stated: “…shall include recognition of the investment eligible senior citizens have made to local infrastructures measured by aggregate property taxes paid.” He said he would support a higher income threshold; however, this proposal provided for a local option and the State to set the thresholds. Commissioner Jordan pointed out that Miami-Dade County was a popular place for people to retire, and she questioned whether the County could continue to provide services if it received less income and fewer resources. She noted her concern was the impact of this proposal on the County’s tax roll and ability to provide services; and she questioned what the alternatives would be to fund services. She asked the County Manager to provide clarification on how the County services were funded. County Manager Burgess noted traditionally property taxes were the primary revenue source for funding local government services. Commissioner Diaz noted this proposal would not reduce taxes or impose another roll back, but would freeze taxes of those individuals 65 years of age or older living on a fixed income and having to pay higher taxes. He noted many people want to live in Florida, but settle in other places with lower property taxes and insurance. Commissioner Diaz noted economic and demographic statistics listed on the County’s website reflected the median household income was $41,000 countywide and rapidly decreasing. Commissioner Seijas noted she was supportive of this proposal, but expressed concern that no one from the School Board or the Children’s Trust had come forward to address their share of the increased property taxes; and although she recognized the need for good schools and competitive teacher salaries, she felt these entities should take some responsibility for increased taxes. She also noted she believed that it was not prudent to ask the State Legislature to reduce property taxes without knowing the outcome, but she would support the sponsors of both proposals going to Tallahassee to address this issue. She asked if there was a way to calculate the County’s revenue loss if this legislation was adopted. Commissioner Jordan clarified that this resolution applied to seniors of lower to middle income levels, but only those at the lower income levels received an exemption. She questioned whether projections could be made on the revenue loss for those at the middle income level as well. County Manager Burgess noted although projections could be made, it would be hard to calculate the numbers if it included seniors in the middle income level. Commissioner Seijas recommended staff make projections before presenting this proposal to the State Legislature. Commissioner Sorenson pointed out that seniors already benefited from an additional $50,000 tax exemption and the Save our Homes cap, which limited increases to a property’s assessed value by 3-percent or the Consumer Price Index (CPI), whichever was lower. She noted that even without the Save our Homes program, the market would equalize because of political pressure to reduce the millage rate. She expressed concern that this proposal could make it more difficult for younger people to purchase homes; and questioned whether it was a good strategy to attract a larger population of low-income seniors to South Florida considering they had little income to contribute to the community’s economy. Commissioner Barreiro noted he believed the tax structure needed to be changed and that continuing to tweak the tax laws would result in unintended consequences. He questioned whether County staff could be responsible for sending out only the County’s portion of the tax bill, since the County was governed by a Home Rule Charter and its Tax Collector was not elected, or whether the County was obligated to send out tax bills for all taxing agencies pursuant to State mandate. County Attorney Cuevas advised that the County was obligated to send out tax bills for all taxing jurisdictions countywide. Commissioner Barreiro asked the County Attorney to provide him with a legal opinion on whether the County was obligated by the Home Rule Charter to include all the taxing agencies’ and Countywide municipalities’ collectible taxes in the Truth in Millage (TRIM) notices that it sends out to taxpayers. County Manager Burgess noted he would verify this, but believed the County was responsible for collecting taxes through its Tax Collector for all of its taxing jurisdictions, including municipalities, pursuant to the Charter. Commissioner Diaz noted the primary problem was that “Miami-Dade County” appeared at the top of all TRIM notices, and the residents of this community assumed that all tax increases were imposed by the County. He questioned whether the tax increases imposed by each taxing jurisdiction could be printed separately or reflected in separate columns on the TRIM notice. Commissioner Gimenez said he disagreed with Commissioner Sorenson’s comment that the market would equalize because of political pressure to reduce the millage rate. He noted the County never really rolled back its taxes when the market drove property values so high. He also noted that although downsizing for seniors made sense to some, it should be their choice to downsize and they should not be forced out of their homes. Chairman Moss expressed concern that this resolution would have unintended consequences and he could not support it without knowing its impact. Commissioner Diaz pointed out that no other process existed to deal with this matter, and he felt this was one way to address the issue. Hearing no further comments or questions, the Board proceeded to vote on this item as presented.

County Manager	10/15/2010		Additions		10/19/2010

County Attorney	10/15/2010		Assigned	Jess M. McCarty

Legislative Text

TITLE
RESOLUTION URGING THE FLORIDA LEGISLATURE TO PASS A JOINT RESOLUTION THAT WOULD PROPOSE A CONSTITUTIONAL AMENDMENT TO PROVIDE FOR A LOCAL OPTION TO PROHIBIT INCREASES IN THE TOTAL PROPERTY TAX BILL OF HOMESTEAD PROPERTY OF LOW AND MIDDLE INCOME SENIOR CITIZENS

BODY

WHEREAS, senior citizens retire to lower or often fixed incomes, and have few opportunities to increase their incomes; and
WHEREAS, the current economic downturn has hit senior citizens particularly hard; and
WHEREAS, Social Security payments did not have a cost of living increase this year for the first time in over two decades; and
WHEREAS, many senior citizens who thought they had saved enough money for retirement saw their investments plummet as the stock market declined; and
WHEREAS, senior citizens often have higher health care, insurance, and energy costs than their younger counterparts; and
WHEREAS, Florida law currently provides some property tax relief to senior citizens allowing them to remain in their homes despite rising property values and property taxes; and
WHEREAS, options are available to some senior citizens under Florida law to defer property taxes; and
WHEREAS, homeowners 65 years of age and older also can receive an additional homestead exemption if they do not surpass certain household income limits that is in addition to the homestead exemptions available to all homestead property owners; and

>>WHEREAS, the additional homestead exemption for low income senior citizens
currently is available if a senior citizen�s annual adjusted household income does not exceed $25,780; and<<1
WHEREAS, the household income limitations to qualify for the additional homestead exemption for low income senior citizens is tied to the Consumer Price Index (CPI) pursuant to Florida law, and increases or decreases each year with changes in the CPI; and
WHEREAS, senior citizens with a homestead exemption also benefit from the Save Our Homes cap, which limits increases in the assessed value of the property each year by 3 percent or the CPI, whichever is lower; and
>>WHEREAS, the CPI was set at 2.7 percent for 2010, meaning the assessed value of homestead property could increase no more than 2.7 percent for the current year pursuant to Save Our Homes; and
WHEREAS, in many cases, the market value of homestead property declined in the current year, but many low and middle income senior citizens nonetheless saw the assessed value of their homestead properties increase by 2.7 percent because of the Recapture Rule, which required property appraisers to increase the prior year�s assessed value of a homestead property by 2.7 percent, whenever the assessed value is lower than the market value; and<<
WHEREAS, despite the Save Our Homes cap, the cumulative effect of small annual increases in assessed value over many years has lead to significantly higher property taxes for senior citizens who have lived in their homes for many years; and
WHEREAS, >>low and middle income<< senior citizens are still in need of property tax relief particularly during the current economic downturn; and
WHEREAS, some states, >>including Connecticut, Illinois and New Jersey,<< have prohibited increases in the assessed value of homestead property of senior citizens receiving homestead exemption >>and whose annual income does not exceed certain thresholds, essentially freezing or capping the assessed values of low and middle income senior citizens� homes; and<<
WHEREAS, a constitutional amendment approved by the Florida voters would be necessary >>to prohibit increases in the total property tax bill of homestead property of low and middle income<< senior citizens; and
>>WHEREAS, many senior citizens with modest incomes nonetheless exceed the current income limit of $25,780 for the additional homestead exemption for low income senior citizens; and<<
WHEREAS, the Florida Legislature has the authority to place such constitutional amendments on the statewide ballot,
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF MIAMI-DADE COUNTY, FLORIDA, that this Board:
Section 1. Urges the Florida Legislature to pass a joint resolution that would propose a constitutional amendment >>to provide a local option to prohibit increases in, and impose a ceiling on, the total property tax bill of homestead property of low and middle income senior citizens whose annual income does not exceed $50,000, with an escalator to account for inflation in future years. To the extent permitted by law, eligibility for such a property tax ceiling shall include a recognition of the investment eligible senior citizens have made to local infrastructure measured by aggregate property taxes paid.<<
[[increases in the assessed value of homestead property of senior citizens.]]
Section 2. Directs the Clerk of the Board to transmit a certified copy of this resolution to the Governor, Senate President, House Speaker, and the Chair and Members of the Miami-Dade County State Legislative Delegation.
Section 3. Directs the County's state lobbyists to advocate against the legislation set forth in Section 1 above, and authorizes and directs that the Office of Intergovernmental Affairs to include this item in the 2011 State Legislative Package.

1 The differences between the substitute and the original item are indicated as follows: words stricken through and/or [[double bracketed]] shall be deleted, words underscored and/or >>double arrowed<< constitute the amendment proposed.