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Columnist sees a better way to tax cuts

A columnist for a newspaper in California says he thinks he has a better way to, in effect, cut taxes while stimulating the housing market.
Jonathan Lansner writes a column for the Orange County REGISTER. Here’s what he suggests: Double the mortgage interest payment deduction that you can claim on your income taxes.
Under the current tax law, you can deduct a dollar for every dollar you pay out in mortgage interest. Lansner says doubling that allowance to $2 would pay a number of benefits: It would lower the effective mortgage interest rate; it would lower the cost of borrowing no matter what the interest rate of one’s loan; and it would be a de facto tax cut for the middle class, giving them more spending power.
Lansner says the move might be enough to turn skitterish lookers into actual buyers, since home ownership would be the way to reap the benefits of the plan. Adding another benefit of home ownership over renting also might make more people think about finding ways to stay in their homes, rather than succumb to foreclosure.
According to Lansner, his idea ought to cost around $80 billion — a lot of money, but not so much when you compare it to some of the recent bailout numbers that have been bandied about.
Lansner also says that if you like his idea, you may want to consider re-instituting some of the interest deductions we used to enjoy — deductions for interest paid on auto loans, credit cards, student loans and the like that went away in the mid-1980s.
Want to learn more? Visit his column: http://www.ocregister.com/articles/tax-mortgage-interest-2229103-costs-home
What do you think — are there benefits that would apply here in Pinellas County?

Counters

Tags: real estate, taxes

Can you stand another tax story?

I don’t know whether I can or not, but people are sure interested in what’s going on around here property tax-wise.

Anyway … the city of Clearwater isn’t avoiding the great property tax debate. Tonight, city commissioners will meet (that’s Thursday night, September 21) to talk about budget issues for the coming fiscal year, which begins Oct. 1. And they are likely to lower the tax rate a bit more. Earlier, the commissioners lowered the millage rate from 5.75 to 5.42, and it looks now as though the council will be lowering the rate some more, this time to 5.25.

The council is expected to meet again in the near future to discuss whether some city services will have to be cut because of the property tax cuts. City officials have pointed out that the city is dealing with increased costs like everyone else, costs that include higher fuel costs, higher insurance rates and increases in city pension contributions.

Tags: Clearwater, taxes

… And even more on taxes

 In my last post (about property taxes in Dunedin) I mentioned that Pinellas County property tax revenue will go up this year by $148 million simply because property values have gone up so much.

Now, Pinellas County has taken steps to reduce property taxes in response to pressure from county taxpayers.

Yesterday (that would be Tuesday, Sept. 19), county commissioners agreed to lower property tax rates to a level that hasn’t been seen since around 1990. The action came during a County Commission meeting that was attended by more than 250 taxpayers, some of them a bit irate.

The commission agreed to lower property taxes by 10.3 percent. Many of the taxpayers in attendance said they wanted even deeper cuts, but the commissioners said it was too late in the budget cycle to reduce taxes more than that. They said the state of Florida will have to get the message from angry taxpayers if property tax rates are to go down any more — the state has dealt with its own tax revenue problems by pushing a lot of revenue requirements down to the local level.

What the lower tax rate will mean is around $36 million less in revenue for Pinellas County. Commissioners say they will have to make budget cuts and make cuts in programs and staff to meet the new spending limits.

Still, the Pinellas County budget stands at $1.926 billion for 2007. That’s Billion, with a “B”.

Small business owners have been particularly hard-hit by increasing taxes. If you have a small business that owns property, you don’t enjoy the benefits of the annual cap on property assessments that apply to homeowners who occupy the homes they own.

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If you’d like to see what area people are saying about taxes, go to www.itsyourtimes.com and scroll down to “taxes are killing us.” Itsyourtimes.com is a blog run by the St. Petersburg TIMES.

Tags: North Pinellas County, taxes

More taxes, this time from Dunedin again

Now, the City Commission has reduced the tax rate even more, in response to angry local taxpayers who are upset (like everyone else) about increasing property taxes.

Throughout Tampa Bay and across Florida (and beyond Florida, as well), taxpayers are getting up in arms about property tax rates. In this area, at least, the culprit is exploding property values. Home valuations have shot up, and that increase in value results in higher property taxes.

Here’s an example of what that means locally; Pinellas County will rake in $148 million more in tax revenue this year without having to increase tax rates one bit — the huge increase in property tax valuations is at fault.

Anyway, back to Dunedin: A few days ago the City Commission voted to drop the millage rate by 5 percent in response to angry taxpayers. Scores of taxpayers showed up at a commission meeting and pleaded with commissioners to provide some relief. And the commissioners said at the meeting that they will consider additional tax rate cuts, even thought the result may be cuts in city services.

Across the region and the state, it is looking more and more like a full-fledged taxpayer revolt in the making. Stay tuned.

Tags: Dunedin, pinellas county, taxes

No tax cut in St. Pete?

If you’ve been reading this blog for a while, you’ve seen several stories about how rising property valuations have increased property taxes, and how some counties and municipalities have been at least thinking about cutting the mill rate to provide some property tax relief.

Of course, the trouble is that cuts in the mill rate are seldom (never?) substantial enough to get property taxes down to where they were before the property values began to rise. Some government jurisdictions find the prospect of “found money” just too tempting to ignore. It’s like getting a substantial tax increase without having to actually vote on raising taxes.

The latest story appeared today in the St. Petersburg TIMES, headlined “Rising fees may cancel tax cut.” St. Petersburg recently announced a 5 percent tax cut for 2007. But now the city is saying that increases in water, sewer and trash pickup fees will go up an average of $4.15 per month, and that will effectively wipe out any of the tax cut benefits.

The St. Petersburg City Council will consider the fee increases during their two meetings in September.

This has been a tough year for homeowners and prospective homeowners in Florida. As I write this, the latest tropical storm/hurricane (Ernesto) is heading our way, and all the hurricanes of the past couple of years has driven home insurance rates way up. Also, the hot real estate market of the past two years has pushed up property values, and that has led to great increases in property taxes.

Counties and municipalities need to have the political will to return a portion of that new-found money to the taxpayers. I read recently that Pinellas County will enjoy an additional $140+ million this year just because of new tax revenue resulting from higher property values.

I realize that the cost of running government goes up, and that someone has to pay for the services that we demand. Still, county and municipal commissioners shouldn’t look at all this additional revenue as “found money.” The people who pay these taxes are in serious need of some relief, and our elected officials need to deliver it.

Tags: St. Petersburg, taxes

Property taxes UP in Pinellas County

I’ve written recently about property valuations going up in nearby counties. But I haven’t been able to report anything about Pinellas County because county tax officials hadn’t released any figures.

That’s changed. As expected, the property valuation numbers for Pinellas are up. WAY up.

According to Property Tax Appraiser Jim Smith, the value of property in Pinellas County has risen 20.3 percent over last year. That means that property in the county is now valued at $75.7 billion.

In 2005, property values rose 14.6 percent; in 2004, the increase was 10.7 percent. So this year’s valuation increase is huge.

Over in neighboring Hillsborough County (that’s where Tampa is located, for all you out-of-staters), the property valuation is up even more than in Pinellas — 22 percent.

Property owners may not be too happy about the sharp increase, because it will undoubtedly mean higher property taxes. But county budget officials are smiling, because the increase in valuations will mean about $45 million in additional county tax revenues. According to the County Commission, at least some of that increase will be returned to the taxpayers as part of a property tax cut.

That cut might total $10 million – $11 million off the $45 million increase.

Tags: pinellas, taxes

Tax rates likely to come down in Citrus County, too

Remember that post a few days ago that said increasing property values in Pasco County would probably result in a lowered tax rate? Well, now the same thing is happening a couple of counties north of Pasco, in Citrus County.

According to Citrus County Property Appraiser Melanie Hensley, this year’s total county property value, $10.46 billion, is 22 percent higher than last year’s value. So county commissioners will be looking at a lower tax rate, probably sometime in July.

No word yet from Pinellas County, but we will probably see a downward tax rate adjustment here, too, if the experiences in other nearby counties are any indication.

Tags: Add new tag, Florida, taxes

Are lower taxes in Pasco County’s future?

Could property taxes actually be headed down in Pasco County?

That’s the way it looks, even though most property owners have experienced recent tax increases as the value of their properties has gone up.

So why should property taxes be headed down? Because the county’s tax base has been headed steeply up, driven by the continuing upswing in development. All that new construction has resulted in a much more valuable tax base, up an estimated 27 percent in 2006 over 2005.

Mike Wells, the Pasco County tax appraiser, says the tax base was $19.9 billion in 2005, but will be an estimated $25.3 billion this year. That is the biggest one-year tax base increase ever recorded in the county.

When the tax base has grown in the past, county officials have responded by dropping the millage rate, and many of them are predicting that another drop in the tax rate should be coming up, thanks to the expanding tax base.

County officials say that if the millage rate is not dropped, the broadened tax base should generate an additional $87 million or more in new tax revenues.

Tags: Pasco County, taxes