Is Eliminating Property Tax the Next Step Toward Defunding Florida’s Public Schools?
How do we pay for the government services that we want? How do we assure a system of high quality public schools, well maintained roads, parks, and police protection? In Florida, local governments, including counties, cities, and school districts rely, to a significant extent, on property taxes.
Florida’s freshman representative, Ryan Chamberlin (R-24, Marion County) is not a fan of property tax and is on a mission to phase out property taxes altogether. He believes that if Florida, which already has no state income tax, were to also eliminate property taxes, “we would not only be the most prosperous state in the country, we would be the most prosperous economy in the world.”
Property taxes are annual taxes that property owners need to pay based on the assessed value of their property. The property tax rate, or millage rate, is set by various taxing authorities, such as the county commission, city council, school board, and special districts such as water management. In Florida, property taxes are used to fund public schools and local infrastructure, including roads, libraries, police, fire and some medical services.
Chamberlin’s first ever bill, HB1371, requires the Office of Program Policy Analysis and Government Accountability (OPPAGA) to study the potential impact of eliminating all property tax and replacing the lost revenue with a consumption tax. At its first committee stop, House Ways and Means on 1/31/24, the bill was amended to ensure the study results were back in time to “take action” during the next legislative next session.
A consumption tax is a tax on the purchase of a good or service. Consumption taxes can take the form of sales taxes, tariffs, excise, and other taxes on consumed goods and services. With no state income tax (forbidden by Florida’s Consitutuion) Florida’s state government generates the bulk of general revenue (75% to 80% depending on the year) from sales tax collections. It gets the rest from a variety of sources, including documentary stamp taxes, insurance taxes and corporate income taxes.
Chamberlin is a guy who really hates property tax, which he claims is ” the most hated tax in America.” He believes the state’s ability to cease your private property if you fail to pay your property taxes means that, in Florida, “that no one owns their property, we simply rent it from the state.
He declared, “This is not a tax, it is slavery.”
Chamberlin maintains that working class families and seniors who have been paying property taxes for 50 years, or more, “have just had enough of this.” The first step in the process is to order the OPPAGA study and get the results back in time to take action next session.
Republican committee members generally agreed with Chamberlin:
- Rep. Rick Roth (R-94, Palm Beach) called the bill “awesome” and noted that House leadership, including the current House speaker and the incoming speaker were promoting the idea of eliminating property tax. He believes eliminating property taxes will make Palm Beach County a more affordable place for he and his family to live.
- Rep. Jeff Holcomb (R-53, Hernando and Pasco) said HB1371 is a “great bill” calling property tax an unfair tax and believing its elimination will lead to less government (which he believes is a great thing).
- Rep. Doug Bankson (R-39, Orange and Seminole) said he loved “that we are looking at the root of our tax system” and called the progressive tax at the federal level “the 14th plank of the communist manifesto.”
- Rep. Danny Alvarez (R-69, Hillsborough) likes the bill so much that he is changing Chamberlin’s name in his phone to “Slugger” because, with this first bill, he is swinging for the fences.
- Rep Wyman Duggan (R-12, Duval) noted his approval for moving up the OPPAGA study’s delivery date because why “waste a session when we could take action” next year?
- Rep Webster Barnaby (R-29, Volusia) told Chamberlin his “opening statement rings true to me” – presumably meaning the part about no one really owning their property if they have to pay property tax and not the part about it being equivalent to slavery. But who know, Barnaby is the state representative who made national news for referring to transgender individuals as mutants, demons and imps and has referred to the new media as “‘a den of vipers’ from which emanates ‘the stench of evil.'”
The Democrats on the committee were less enthusiastic and more circumspect.
- Rep. Joe Casello (D-90, Palm Beach) worried that eliminating by property tax, which local governments rely on, could result in Florida having have one of the highest sales tax rates in the nation in order to compensate for that loss. Chamberlin agreed his plan would likely result in higher consumption taxes, like sales tax. Cansello also argued Floridians aren’t necessarily losing their homes because of property taxes but because of homeowners insurance, on which a study is more merited.
- Rep. Allison Tant (D-9, Madison and Parts of Jefferson, Leon) was concerned that an increase in consumption taxes would hit small fiscally restrained counties (like Madison and Jefferson) particularly hard and questioned their ability to generate enough revenue to sustain local government. She also was concerned that increased sales tax would affect tourism and communities abilities to fund schools and first responders.
- Rep. Anna Eskamani (D-42, Orange), the committee’s Democratic Ranking Member, wondered if Chamberlin was concerned about the regressive nature of sales tax and asked whether he would be interested in exploring all types of taxes. Chamberlin was not interested in anything except doing away with property tax in the State of Florida. She also asked him if he had spoken to any economists about the possible impacts of eliminating property tax – he had not.
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During debate on the bill, Rep. Anna Eskamani, who has served on the House Ways and Means committee for 5-6 years, gave a clinic on tax policy. (You should watch her here at 1:21:20). She explained there are typically three types of revenue via taxation: Income (not allowed in Florida), Wealth (primarily Property Tax) and Sales (the primary consumption tax). She reminded her colleagues this isn’t the first time the elimination of Property Tax was discussed in the Florida House (citing previous efforts by former speakers Rubio and Webster). Both times the idea was rejected for a couple of reasons:
- Relying on Sales Tax, alone, is Unsustainable: Sales tax revenue drops during economic downturns when people buy less, unlike property tax.
- Eliminating Property Tax Might Disincentivize Local Governments: Without property taxes, local governments might lose incentive to maintain property values.
- The Switch to All Sales Tax would be Regressive: Sales tax disproportionately burdens lower-income earners who spend a larger portion of their income on necessities.
- The Switch would lead to a Significant Sales Tax Increase: Implementing this policy could require a 7% increase in the sales tax (to 14%), significantly impacting purchasing behavior and likely reducing revenue further.
Rep. Eskamani voiced her concern with the limited scope of the proposed OPPAGA study, focusing only on the elimination of property ta and ignoring broader possibilities like examining:
- All tax structures and their impact on different income groups.
- All sales tax exemptions in Florida for potential adjustments.
- Corporate income tax and combined reporting for potential revenue generation.
Eskamani said she would be supportive of a more comprehensive study examining all tax structures and their impact on different income brackets before considering such a drastic change.
Finally, she urged caution against using inflammatory language like “slavery” when discussing tax policy. She attempted to give a brief historical context about the creation of the sales tax in Mississippi, suggesting its motivation was shifting the tax burden “from one group to another” but was cut off by Chair McClain (R-27)who insisted she “stick to the content of the bill.”
For those interested in the history of Sales Tax in Mississipi:
The Committee voted 15-6 to approve HB 1371. On 2/2/24 the bill was fast-tracked by leadership, removing its original reference to Local Administration, Federal Affairs & Special Districts Subcommittee and moving it directly to the State Affairs Committee. Currently there is no Senate companion.
If HB1371 makes it across the finish line and the OPPAGA study is ordered, there will be a lot of discussion about property tax next session. Currently, public schools are primarily funded by local property tax and the Florida Education Finance Program (the State’s funding formula for public schools, commonly referred to as the FEFP) uses property tax to equitably distribution those funds. Suffice it to say, the elimination of property taxes in Florida will disrupt our public school system, which may be considered a feature and not a bug for our current legislature.
If the goal is to disrupt and defund public schools in Florida, HB1371 is a further step in that direction.
I used these sources to learn more about Florida’s Tax Policy:
https://www.taxpolicycenter.org/taxvox/critics-argue-property-tax-unfair-do-they-have-point
Here is the bill’s Staff Analysis:
https://www.flsenate.gov/Session/Bill/2024/1371/Analyses/h1371.WMC.PDF