Charlotte Sun editorial writers this morning advocated a simplified property tax system for Florida. Unfortunately, the writers mixed up and misrepresented a significant number of important facts that are well-known to even cub reporters assigned keep an eye on the local property appraiser's office.
For starters, the writer insists on referring to a property’s “true market value.” This phrase is not part of the tax code, tax legislation, or the paragraphs in the state constitution (Article VII, section 4) that tackle the topic of property taxes. It’s misleading to readers to insert a vague, undefined, and emotion-charged phrase into a discussion that’s already breaking hearts (and bank accounts) across the state.
The state’s constitution, legislation and the rules about appraising property all refer to “just valuation.” In the many places where it’s used, the term “just value” is carefully defined. Every citizen would do well to know that definition. Here it is: “Just value” is the present cash value of a property, which is the amount a willing purchaser would pay a willing seller, exclusive of reasonable fees and costs of purchase, in cash or its immediate equivalent in an arm’s-length transaction.
Perhaps the editorial writer intended his phrase, “true market value,” to mean the same thing as the recognized term. If so, he would best serve readers who want to understand the issues, who may want to write their representatives, or who plan to talk to local property appraisers by using the language of the primary documents.
But that’s not even the big error. The most egregious mistake shows up about halfway down, where the writer wrongly informs readers: “Perhaps the greatest flaw in the property tax system is that by law, homestead property is on the tax roll at only 80 percent of its true market value.”
This is simply not true. Properties that qualify for a homestead exemption are listed on the property appraiser's rolls at 100 percent of their just value, just like any other property. This is "by law." The first $25,000 of the homestead's appraised value is exempt from taxes. But the property is on the roll at its full, just value: its appraisal.
The writer may have confused certain parts of First and Eighth Criteria, a Department of Revenue rule based on the first and last of eight paragraphs in section 193.011 of state statutes, where every citizen can read the language that guides property appraisals. The rule is well known to reporters, journalists and editorial writers who bird-dog the property appraisal and tax issues. It says property appraisers may exclude from “just value” the cost of “usual and reasonable fees and costs of sale, including the costs and expenses of financing,” among other, similar items. As a result, local property appraisers generally deduct about 15 percent from the recorded selling price to arrive at a just value. .
It would not be wrong to describe this process as creating appraisals that are about 85 percent of the selling price that buyer and seller agreed to in an arm’s-length transaction, or about 85 percent of an estimated fair market value, in cases where there is no recent sale and “comparable properties” are used as a guideline.
Any valuation that employs greater than a 15 percent “reduction” below selling price is justified, documented, and explained in an appraiser's narrative for each such property. There is no statute or legislation, as the editorial writer claims, “allowing property appraisers to undervalue homes, but only by 20 percent.”
Once the editorial writer corrects these mistakes, the rest of the essay pretty much falls apart. Readers who see the holes in this piece of Swiss cheese will be quick to detect a decided lack of substance. Informed readers can easily see that editorial Steps 1 and 2 are already facts of life and taxes; they are not the writer's new proposals, as he claims.
The writer’s cutsy Step 3: “That’s all,” (i.e. do nothing more that 1 and 2), is qualified by his own words: “our simple solution to tax equity would need some tweaking.” Unfortunately, he has spent 700-plus words not saying what tweak he proposes. However, his tweak will, evidently, be based on errors and misunderstanding. But even that's no so bad; many people are misinformed and still hold opinions. The sorry part is The Charlotte Sun's editorialist articulates a position for the entire paper -- and recommends to the community -- based on his own ignorance of how his government operates.
Shame on you, Charlotte Sun. Please send someone downtown to talk to a local property appraiser and bone up on the state constitution. Your readers deserve better.