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Date of Issue: October 18, 2007

CART: Galvano tax effort praised

State Rep. Bill Galvano announced last week he plans to introduce legislation during the current special session of the Florida Legislature that would change a long-standing method of property appraisal.

Galvano said his legislation would remove the “factor of highest and best use considered by property appraisers in deriving just valuation of property.”

This method has been a thorn in the side of Island business owners for several years, particularly “mom-and-pop” motel owners, because it allows the property appraiser to appraise a motel as a condominium. That method has caused property taxes to increase in some cases three and four fold the past five years.

Galvano said property appraisers value property for tax purposes on “potential use,” rather than “current use,” a method that allows for inflated property values resulting in increased taxation.

The bill would also require property appraisers, “in arriving at just value,” to consider only the income from income producing property.

“The legislation is necessary if we want to keep Florida in the tourism business. My district includes waterfront businesses that will not survive another year of being disproportionately taxed,” he said.

Numerous mom-and-pop accommodations on Anna Maria Island have either closed or converted to condominiums in the past five years because they are being “taxed out of business,” Galvano noted.

Don Schroder of the grassroots Citizens Against Rising Taxation organization based on Anna Maria Island praised Galvano’s effort.

“I think Galvano has put his reputation on the line and is looking out for Island businesses. We applaud his effort and look forward to supporting his legislation,” said Schroder.

But there’s still more that has to be done to keep Florida’s economy afloat, he noted.

In a state dominated by the tourism and real estate industries, the Legislature must still address the problem of non-homesteaded property owners, Schroder added.

Since the “Save Our Homes” initative limits property tax increases on homesteaded property to a maximum of 3 percent annually, Florida property appraisers have cast a keen eye to not just accommodations that could be appraised as condominiums resulting in more taxes, but non-homesteaded single-family homes as well.

Without the protection of the homestead exemption, non-homesteaded property owners have fallen into the same category as the accommodation owners, paying ever-increasing property taxes. That, Schroder has said, has hurt Florida’s real estate industry as it has become extremely difficult to sell to investors and out-of-state residents with the prospect of high taxes staring them in the face.

“It puts undue pressure and taxation on the non-homesteaded property owner,” Schroder said.

But not everyone was pleased with Galvano’s pending legislation. Manatee County Property Appraiser Charles Hackney said the highest and best use appraisal method is the “foundation of any appraisal.”

“It’s the first step,” he observed. “You can’t compare properties without the highest and best use method. Without a highest and best use, appraisal just doesn’t work.”

Hackney also noted that if municipalities would change the zoning of the land where the mom-and-pop accommodations are located, using a condominium as a comparable for highest and best use would disappear.

“If you re-do the zoning and eliminate condos in that zone, then the highest and best use is always a motel, not a condo,” he said.

Hackney said he’s brought this zoning change possibility to the attention of CART and Island municipal governments, but none seemed interested in changing zoning for an area that might also limit the value of a single-family home.

“They don’t want to lose a tax base, but my job is not concerned with a city’s tax base,” he said.