Now that Florida voters have rejected Amendment 4 by a resounding margin, the focus shifts to how the state’s property tax system might be addressed going forward.

In the run-up to Tuesday’s election, both sides of the debate said Florida’s tax system was in serious need of a long-term fix. But nearly 57 percent of voters decided the three-pronged constitutional amendment was not the solution. It needed 60 percent backing to pass.

Amendment 4 would have slashed the 10 percent cap on tax assessment increases for nonhomestead properties to 5 percent starting Jan. 1. Also, first-time home buyers would have been eligible for an additional five-year homestead exemption. A third element, dubbed by some the recapture provision, would have given the Florida Legislature the authority to pass a law preventing assessment increases for certain properties if the market value declined in a given year.

Of the 12 proposed constitutional amendments on the ballot, Amendment 4 was in the spotlight for its potential impact on the state’s real estate market and damage to municipal revenue.

Opponents like the Florida League of Cities agreed the state needs extensive tax reform but said the proposal would only exacerbate flaws in the system.

The defeat shows voters will not accept a “one-size-fits-all approach to tax reform,” League of Cities president and Sweetwater Mayor Manny Maroño said in a statement.
“Now that voters have rightly refused the Amendment 4-style approach, we’re eager to work with the Legislature to fix the fundamental flaws in Florida’s tax system while adhering to the clearly expressed will of the voters.”

Proponents like real estate industry trade group Florida Realtors raised millions of dollars in support of the amendment. They said the measure would provide several much-needed remedies, most notably removing a 10 percent cap that shifted much of the taxable burden to non-homesteaded property owners when adopted in 2008.

Additionally, proponents said allowing the Legislature to reduce the spread between a property’s assessed and true market value would significantly benefit owners.

In an interview Wednesday, Florida Realtors lobbyist Trey Price said the “extremely long” ballot question drafted by the Legislature undoubtedly caused voter confusion.
Others had difficulty understanding why the property tax system required a constitutional amendment in the first place.

“We continued to get questions and comments like ‘Why do we need to do this by amendment?’ ” Price said. “We found ourselves constantly saying that the property tax system is embedded in the Constitution. The other thing was the length of the amendment.”

No Vote

The impact of voter fatigue on an extended ballot was evident in Miami-Dade County, where about 21 percent skipped the question altogether, according to Miami-Dade County election officials.

In the county’s unofficial tally, 337,992 voters supported the amendment while 343,677 rejected it. The nearly 180,000 voters who passed over the amendment could have made a substantial difference, at least in Miami-Dade.

The amendments that did pass, including property tax relief for veterans and senior citizens, were “simple amendments drawn to politically favorable folks,” said Price, who noted Florida Realtors supported those amendments as well.

Having three elements in Amendment 4 ultimately doomed the measure, according to longtime government affairs attorney Jorge Luis Lopez of Coral Gables.

“The Legislature put too many topics in one amendment,” he said. “On one hand, you had the benefit of three different groups maybe joining together. But you also put some groups against each other. … Having a question that takes up an entire page is just not a good thing.”

The only element of Amendment 4 that will definitely be addressed again is the 10 percent cap on nonhomestead property assessment increases, which is scheduled to expire in 2018. It must be formally repealed through a constitutional amendment.

In the meantime, Florida Realtors plans to “step back” and take a broad look at the overall tax system, Price said.

“We need to assess with the public, our membership, the Legislature and counties” what course should be taken, he said.

With a gubernatorial election looming in 2014, some property tax measure should “absolutely” be expected two years from now, Lopez said.

“That’s a ripe ballot for these kinds of initiatives,” he said. “My advice to the interests in the issue is: break [the elements] up to give people a cleaner look at these and make sure the Legislature has some citizen involvement. You have time so really vet the issue.”