They look good, while you suffer from the results

After Longboat Key Mayor Terry Gans heard Florida Speaker of the House Richard Corcoran speak in Sarasota, he remarked that the impression Corcoran left was that municipalities were lucky to be able to exist and should be grateful to the Legislature.

Another way to put it, and it certainly appears this way: Lawmakers often have disdain for local governments.

Here’s the latest: The Legislature voting to put on the state ballot a constitutional amendment proposing to raise the homestead exemption from $50,000 to $75,000.

On the surface, if you’re a homesteaded property owner, your inclination is to say “Yes!” This would lower your annual property taxes. 

But there are consequences to this that are likely to have adverse effects on the quality of life in your city, county, perhaps even your neighborhood.

Whenever the amount exempted from your property taxes is increased, there is a corresponding reduction in your city and county’s general revenue. This is the primary source of revenue that pays for everything your local government does — police and fire protection, street and sewer maintenance, water, parks, etc.

To be sure, we all believe every government entity can be more efficient. But talk to any mayor or county commissioner in Florida, and they will tell you one of the most pressing challenges they face is delivering services taxpayers expect with the revenue sources in their control.

Everything is a tradeoff. If local taxpayers want more, someone must pay. And the choices to pay are limited: raising the millage rate; increasing (within state limits) city or county sales taxes; and increasing fees.

But when the Legislature orchestrates an increase in the homestead exemption, essentially you have state lawmakers telling city and county governments: “We’ve decided you’re operating inefficiently; we’re going to cut your revenue.”

While state lawmakers tell their constituents at election time they voted to reduce your taxes, local governments must deal with the consequences. 

What’s more, the ill consequences of increasing the homestead exemption are compounded. Pure and simple, the homestead exemption is a subsidy to year-round homeowners. Every second-home owner and every commercial building owner (office, warehouse, rental apartments) pays more than he otherwise would to subsidize full-time resident homeowners.

Under the guise of cutting taxes, this proposed amendment, if passed, will make existing bad policy even worse.

The homestead exemption is anachronism that, in truth, should be eliminated.