2014 Legislature

A loophole costing Miami-Dade $60 million may get fixed by Legislature


Herald/Times Tallahassee Bureau

It’s become commonplace in Miami-Dade County: Agents file property-tax appeals for homeowners — sometimes without their permission — in hopes of sharing in the refund.

For some agents and homeowners, the practice has yielded thousands of dollars.

But for the Miami-Dade school system, a $4 billion public agency funded partially by property taxes, it could cause a $60 million hole in the budget, superintendent Alberto Carvalho said.

Miami-Dade lawmakers are working to help.

Last week, state Rep. Erik Fresen, R-Miami, introduced legislation that would require homeowners to sign off on property-tax appeals. He added the provision, plus language limiting the length of the appeals process, to HB 651.

“It closes the infectious loophole that has created a cottage industry of property appeals that are triggered — not by the property owners — but by those who profit from the hearings themselves,” he said.

Sen. Rene Garcia, R-Miami, plans to add similar language to a proposal in the Senate, he said.

School district leaders are grateful. But they are still hoping for additional legislation that would allow them to fill the budget hole without raising taxes.

“We must seek to avoid the inequity in funding for Miami-Dade’s children compared to other districts that are able to collect their taxes on time,” Carvalho said Tuesday.

Property taxes are an important source of revenue for Florida school systems. State law requires districts to build their budgets around the estimated tax roll provided by the county property appraiser.

That has proved problematic in Miami-Dade.

In recent years, actual tax collections have fallen short of the projections, in part because of the surge in appeals.

What’s more, a two-year log-jam in appeals has kept the school system from receiving its share of tax dollars, Carvalho said.

More than 11,600 petitions from 2012 were pending as of last month, according to the Miami-Dade Property Appraiser’s office.

The state must eventually compensate school districts for unrealized local property tax revenues once all appeals are resolved. But that is not likely to happen in the same budget year.

The cost to the Miami-Dade school system: a potential $60 million hit.

That’s about $86 dollars fewer per student than the district should have otherwise received, Carvalho said.

“At least 50 percent of the increase we receive from Tallahassee this year would go directly into filling that hole,” he said. “Our kids won’t get to see it.”

Garcia said the proposed legislation would accomplish two goals: “ensuring the children of Miami-Dade receive their equitable share of funding, while protecting the right of taxpayers to appeal.”

“Loopholes exist where agents are intentionally delaying the process,” Garcia said. “One agent in Miami-Dade is holding up 3,000 appeals.”

But longtime appeals agent Stanley Beck said his industry is not to blame.

“We’re part of the solution,” Beck said, noting that agents help streamline the appeals process.

Even if the measure succeeds, Carvalho is hoping for additional legislation that would plug the anticipated hole.

Fresen said there was no appetite for a measure that would increase taxes.

But Carvalho hopes lawmakers will let the Miami-Dade district use some of the tax dollars it raises for debt service to help fund classroom operations.

“It does not require an investment from Tallahassee, and it protects the taxpayers from increased taxes,” Carvalho said.

The district would only need the flexibility in the short term, he said.

It was unclear late Tuesday if lawmakers would consider the proposal.

Miami Herald staff writer David Smiley contributed to this report.

Contact Kathleen McGrory at kmcgrory@MiamiHerald.com.

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