Miami Herald | EDITORIAL

Close this costly loophole

 

OUR OPINION: Successful property-tax appeals have cost school district $60 million

HeraldEd@MiamiHerald.com

Miami-Dade schools chief Alberto Carvalho says that there is new threat to the district’s ability to deliver quality education. This time, it’s not bad teachers, lack of state funding or standardized tests.

The ogre is a cottage industry of agents who file property-tax appeals for Miami-Dade homeowners — with or without their permission. It’s a perfectly legal practice, but one that is holding hostage state money to the district, playing havoc with the annual estimates that the district’s finance staff makes about how many millions it will receive from Tallahassee and when it will receive the funds.

Mr. Carvalho says that homeowners’ successful appeals of their property-tax bills now translate to a loss of up to $60 million in anticipated funding for the district. The double whammy comes when delays in processing appeals mean the gut-wrenching shortfall is announced after the district closes its books for the year. This sends the district scrambling for ways to make up the difference year after year.

“That is flirting with bankruptcy,” Mr. Carvalho told the Editorial Board.

It’s gotten so bad, he considers the successful work of the tax-appeal agents “the biggest liability to our school system.”

To figure out how much it should expect annually, each summer the property appraiser issues a preliminary tax roll, estimating the value of properties countywide. By law, the school district bases its budgets — this year set at $4.3 billion — on those projections.

But actual tax collections in recent years have fallen far short of those projections — in large part because of a surge in property-tax appeals.

Miami-Dade property owners have made it routine to dispute their tax bills — as is their right. Almost 200,000 bills were challenged in 2010 and 2011 combined, leading to value reductions collectively worth $15 billion — and a steep drop in revenues for the school district.

Tax-appeal agents offer to challenge the bill on a contingency fee and can do so without a homeowner’s approval, courtesy of a loophole in state law. Many homeowners say their privacy has been violated when they learn an agent has challenged the tax bill without their knowledge; others welcome it.

Mr. Carvalho says the killer for the district is the two-year log-jam of appeals, because Florida will actually cut the district a check for unrealized local property-tax revenues at the end of the year as long as all appeals are resolved and the Miami-Dade tax roll has been “certified.” But the county has been late in certifying.

Some appeals agents say they are being made scapegoats. They say they are simply representing taxpayers who have been overbilled.

‘‘Mr. Carvalho is trying to blame us,’’ said Stanley Beck, a Miami tax attorney, who handles “thousands” of appeals annually, per homeowners’ requests only. “We have nothing to do with Mr. Carvalho’s budget problems.”

Miami-Dade’s lawmakers in Tallahassee should take up Mr. Carvalho’s cause and, more important, the cause of students who, collectively, are being shortchanged. They should work to close a loophole in state law that allows tax agents to file property-tax appeals without consent of a property owner. Their right to do business will be preserved, as will homeowners’ right to determine whether they appeal. Doing so will cap the school-district’s hemorrhaging and end a free-for-all.

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