Dear homeowner: Your taxes will still go up

Many have commented that, now that the "housing bubble" appears to have deflated, property taxes will decrease as housing values recede.

The Sentinel has mentioned an item to the contrary in a couple of their stories, but we'd like to put the WayneWho Math Spotlight on the issue.

Say Joe Homeowner purchased a local home in late 2003 (pre-bubble) for $98,500. The housing market did what it did, and by late 2006, Joe's house was valued at $145,000 (about a 47% increase). This house is Joe's primary home, so he has Save Our Homes protection, keeping his house's taxable value from rising more than 3% a year.

Tax value-wise, Joe's house went like this:
2004: $98,500 x 1.03 = $101,455
2005: $101,455 x 1.03 = $104,498.65
2006: $104,498.65 x 1.03 = $107,633.61 vs. market of $145,000

So say, for 2007 taxes, the market decreases Joe's market value by 20% (which seems like a very high number for one year). $145,000 x .80 = $116,000. That's still a higher number than the 3% allowable Save Our Homes valuation increase for the year ($107,633.61 x 1.03 = $110,862.62), so even though Joe took a 20% market value hit on the house, he still gets to pay an increase in property taxes.

The voters may give, and Save Our Homes may take away. Something to keep in mind the next time there is a complaint about what Tallahassee is doing to local governments' tax revenues.