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Today’s entry: Brian, you’re quite the cheerleader for Florida, which don’t get me wrong I appreciate, but we all know we have problems. I’d like to challenge you with discussing what you feel is the biggest problem our state faces right now and what you think should be done to address it.
Bottom Line: Challenge accepted. While my first thought moved in the direction of education, Florida’s steadily been making progress in education outcomes. In fact, in US News & World Report’s most recent Best State Rankings, Florida’s 3rd best in education nationally.
The issue which sticks out like a sore thumb to me and only continues to get worse is property taxes and insurance. Affordable housing, or the lack thereof, is a common topic discussed by public officials and often addressed in local news reporting but what rarely is talked about are the carrying costs of homes in our state. I’ll throw a couple of numbers at you that are telling. Florida’s unemployment rate, at 5%, is below the national average of 5.2% yet Florida’s current foreclosure rate is the 7th highest nationally.
Those numbers don’t really compute and speak to a bigger issue. Foreclosure rates are almost always tied to employment rates. That holds true with the six states in front of us as Illinois, Nevada, New Jersey, Delaware, Ohio, and California all have well-above-average unemployment rates. This also isn’t a case of what happened during the housing crisis of over a decade ago when people were placed in mortgages they couldn’t afford. Those types of mortgages aren’t legal and aren’t available anymore. So, what’s going on?
A one-two punch of ever-increasing property taxes and property insurance along with the country’s largest population of retirees living on a fixed income. And South Florida’s front and center in the conversation.
If you check Florida’s overall property tax burden it looks decent enough as we rank 24th in total tax burden. That’s because much of the state has exceedingly low tax burdens to accompany the overall other tax friendliness of our state. South Florida does not. Consider where South Florida’s counties rank nationally in property taxes out 3,143 Broward is 159, Miami-Dade is 111, and Palm Beach is 166.
This means Broward and Palm Beach County’s property taxes are more expensive than 95% of the country and Miami-Dade's are only outdone by 3.5% of counties across the country. There’s nothing tax-friendly about South Florida. Our local governments have burdened us with property taxes that are nearly as punitive as any in the country. What’s more, is the ever-increasing costs. This year alone the average increase in proposed property taxes is about 5% higher in Broward and Palm Beach County while Miami-Dade's is about 4%. The average current property tax assessment in South Florida is $5,664 in Broward, $5,292 in Miami-Dade, and $6,423 in Palm Beach County.
We’re talking about property taxes consuming about 10% of a household’s gross income. Yes, there’s homesteading which helps considerably for those who can use it, however, 3% year over year on already big numbers is insignificant – especially for those on a fixed income. What’s more is special assessments and voter referendums, such as additional taxes for teachers, schools, etc. can exceed the 3% annual threshold. Then you add in the ever-increasing property insurance costs. I'll cover that in part two.