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Ever since Florida’s real estate bubble burst, planning a budget that meets the city’s needs while living within its means has been among Bob Buckhorn’s chief challenges as mayor.
For this year, Buckhorn proposed an $876 million budget that included a 2.5 percent raise for city employees and started replenishing city reserves, which he had drawn on to balance his previous budgets.
Now, as he seeks a second four-year term, Buckhorn is running a cable television ad that says, "Bob balanced the budget without raising taxes."
But did he?
Two elements go into property owners’ annual tax bills: the value of their property and the tax rate. The first is assessed by county property appraisers. The second is set by local governments. Multiply the assessment by the tax rate — expressed in mills, with 1 mill equaling $1 in property tax for every $1,000 of assessed, taxable value — and that equals the tax owed.
In Tampa, the city has kept the same tax rate — about 5.73 mills, or $5.73 in city taxes for every $1,000 of assessed taxable property value — for eight years.
And Buckhorn notes that the city kept that rate even during the recession, when property values plunged, dragging the city’s revenues down with them. City property tax revenues fell from a high of $160 million in 2009 to about $117.4 million in 2013. During that time, Buckhorn said, the city didn’t raise its tax rate to try to capture more revenue.
"When we were faced with a drastic decline in revenues, we didn’t raise the rates to compensate," Buckhorn told PolitiFact Florida in an interview in his office on Jan. 13, 2015. "So we’ve been consistent about this, and losing $40 million in revenue out of $160 million took a huge toll on us, but to compensate for that, we didn’t bump it up to raise the like amount. We just did more with less money. We ended up laying off 700 people."
In the last two fiscal years, property values have started to rise again, so that the same tax rate now generates more revenue for the city — $123.5 million last year and an expected $132.2 million this year.
Buckhorn said there’s been no tax increase because he did not raise the property tax rate. And he said at the existing tax rate it will take years for the city’s property tax revenues to climb back to where they were.
"When people think of taxes," he said, the tax rate is "largely what they think about. That's what they react to."
But the relationship between tax rates, the value of property and the amount of tax the two generate together has been the focus of Florida’s Truth in Millage (TRIM) law since it was passed in 1980.
The TRIM law requires local governments to tell taxpayers what property tax rate would generate the same revenues for the coming year as in the current year. If property values — not including things like new construction and building additions — have risen, then the calculation determines how much officials would have to "roll back" the tax rate to generate the same level of revenue. If they propose a higher rate — including by keeping the rate they already have — then the law requires them to advertise a tax increase.
That’s what the city of Tampa has done the last two years.
For the city of Tampa's 2013-14 fiscal year, the adopted rate was 4.4 percent higher than the rollback rate.
For the 2014-15 fiscal year, the adopted rate was about 5.2 percent higher than the rollback rate.
Buckhorn said the additional revenue generated by keeping the same property tax rate instead of lowering it to the rollback rate does not count as raising taxes.
"That is a function of the value of the property," Buckhorn said. "It's not a function of the baseline tax (rate) that the city assesses. If I had raised the property tax rate, then I couldn't have made that statement. There's a difference between somebody paying more because the value of their house increases versus the city assessing a higher rate to generate more revenue."
That line of thinking, however, was what legislators were trying to push back when they wrote the Truth in Millage law in 1980.
"This attempt by local officials to blame rising property taxes on increasing assessments and thereby ‘share’ the responsibility for tax hikes with the property appraisers is precisely the problem the TRIM disclosure provisions seek to resolve," according to a Florida State University Law Review article co-authored by then-House Finance and Taxation Committee chairman Steve Pajcic the year the law was passed.
Before then, many taxpayers had focused on appealing their assessments, but with the TRIM law the Legislature was trying "to alert taxpayers to the importance of the millage rate and to encourage them to view it as the factor over which they have the most control," Pajcic and his co-authors wrote.
"It is an incorrect statement to say that you haven’t increased taxes if you don’t go back to the roll-back rate, because you have," Benjamin Phipps, a Tallahassee attorney and expert on property taxation who served as counsel to the Florida House of Representatives Tax Committee and the speaker of the House in the 1970s, told PolitiFact Florida on Jan. 14, 2015.
Buckhorn’s TV ad says he "balanced the budget without raising taxes." Because the city kept its property tax rate constant even as the total value of property in the city rose, the city has seen its property tax revenues rise the past two fiscal years. And it has been required by state law to advertise a tax increase for both of those years. Tax revenues are still significantly below what they were before the real estate crash.
We rate this statement Mostly False.
"Swagger" television commercial, accessed Jan. 15, 2015
Interview with Tampa Mayor Bob Buckhorn, Jan. 13, 2015
Interview with Benjamin Phipps, Jan. 14, 2015
Tampa Bay Times, "Tampa Mayor Bob Buckhorn proposes $876M budget that doesn't dip into reserves," July 24, 2014, accessed Jan. 14, 2015
"Smarter investments for tomorrow’s Tampa: Recommended Operating and Capital Budget, Part 1, Fiscal Year 2015," page 18, accessed Jan. 14, 2015
Hillsborough County Property Appraiser website, "Table 1, Comparison of Taxes Levied County and Municipal Governments, Fiscal Years 2012-13 and 2013-14," accessed Jan. 14, 2015
2014 Florida Statutes, Title XIV, Taxation and Finance, Chapter 200, Determination of Millage, accessed Jan. 14, 2015
"Truth or Consequences: Florida Opts for Truth in Millage in Response to the Proposition 13 Syndrome," pages 611 and 613, by Steve Pajcic, Vicki Weber and James Francis in the Florida State University Law Review, Fall 1980, accessed via HeinOnline.org, Jan. 16, 2015
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