Posted on Wed, Aug. 06, 2008

The bursting of the Florida real-estate bubble now has a price tag: $153 billion.

That's the loss in market value of all Florida properties, from houses to businesses, between 2007 and 2008.

As a result, state economists say, the total value of the state's properties will decrease an unprecedented 6 percent. That's double what they had estimated in November, when they noted the fast-booming state had never experienced such a decline in recent times.

The 6 percent decrease would be even higher were it not for a relatively modest $55.6 billion in new construction, which is forecast to decrease almost 35 percent, to about $36.4 billion, for the 2009 tax rolls.

Property values will continue to decline next year, too, as the real-estate market corrects itself after years of double-digit, speculator-fueled growth. As it drops, so will the economy, likely leading to painful budget cuts in local governments in the coming months.

The state's total property value is estimated to drop an additional 4.92 percent next year, ticking down from $2.43 trillion to almost $2.35 trillion in 2009, according to economists from the state House, Senate, tax department and governor's office who met Friday to estimate the total property values of the state for purposes of figuring school taxes.

The economists say there are some bright spots. They predict the economy will slowly begin improving sometime next year. Meantime, homes, particularly those facing foreclosure, are becoming affordable.

'You're seeing more of what you would think of as `fire sales,' just really rock-bottom prices to move property,'' said the Legislature's chief economist, Amy Baker. ``It's not a terrible thing. You want to see that.''

MIAMI-DADE HIT HARD

One county stood out for the property-value losses: Miami-Dade, which is being hard hit by foreclosures and dropping prices.

''It seems like Miami-Dade is picking up declining [property-value] speed . . . or falling off a cliff,'' Senate tax analyst Ellen Fournier said.

The loss in so much market value also translates into a loss of taxable value for schools and local governments, a decrease of .3 percent this year and 1.5 percent in 2009 for schools statewide.

Such a decline in 2009 would mean that schools would lose about $140 million statewide, unless the Legislature increases the tax rate -- something local governments like Miami-Dade are considering this summer to make up for the 2008 loss in taxable values.

Miami-Dade is predicted to shed nearly $7 billion in taxable value next year for schools alone. Broward County schools' taxable value could drop by nearly $5 billion. Monroe County schools: about $1 billion.

''What's happening in the market today will not be reflected until next year, which is going to be worse, from everything we've seen,'' said Broward County Property Appraiser Lori Parrish, pinning much of the blame on ``really unscrupulous mortgage brokers.''

MORE CUTS POSSIBLE

With construction and home-sales grinding to a near-halt, state sales-tax and real-estate tax collections are dropping as well. So the economists are likely to forecast at their Aug. 15 meeting a big budget hole on top of the $6 billion the Legislature and Gov. Charlie Crist already cut over the past year. That may require more budget cuts and dipping into the state's dwindling reserves.

Crist has been feeling the heat of the bad economy, which has started to pull his poll numbers down. Groups like AARP and Florida Tax Watch are urging Crist and legislators to consider more legalized, taxable gambling and a concerted effort to get more tax money back from the federal government.

Crist's solution: more property-tax cuts and more made-for-TV public appearances with small-business owners.

Departing from months of near-silence over a so-called ''tax swap'' plan that will be on the Nov. 4 ballot, Crist actively began touting it at back-to-back events Monday and Tuesday in Tallahassee. The measure, Amendment 5, would eliminate the school property-tax rates required by the Legislature. That would wipe out about 25 percent of the average homeowner's tax bill. In return, the Legislature would have to increase the sales tax a penny, cut other parts of the budget and raise as-yet-unknown taxes.

Most business and social-service groups oppose Amendment 5. The realty lobby favors it. The state economists Friday said its effect was unclear.

But Crist doesn't see it that way.

''If this Amendment 5 were to pass in November, which I hope it does, people will look at that as a lot more than a tweak,'' he said. ``A 25 percent reduction in property taxes -- not just for homesteads, but for second homes, for small businesses owners -- that's more than tweak, I would think.''

OPPOSITION

Crist has promised big savings before. He barnstormed the state last winter, saying his property-tax plan would help ''fire up'' Florida's ''economic engine'' if voters approved it Jan. 29.

The plan's centerpiece: portability, which enables homesteaded property owners to transfer their Save Our Homes equity to a new home so they don't get taxed on the full market value of the new property.

The economists estimate the total value that can be ''ported'' statewide has decreased by a surprising 26 percent -- from about $426 billion last year to $315 billion.

That's the starkest sign that primary homes are leading the real-estate crash.

And the construction industry is feeling it. It lost about 80,000 jobs in a year, making Florida the No. 1 job-loss state in the nation.

''We're basically an unhealthy patient right now,'' Robert Parrish, president of the Florida Home Builders Association, told Gov. Charlie Crist in a Tuesday round-table discussion with business leaders.

''We're not getting any better,'' Parrish continued. ``We could be getting sicker. We're looking for the doctor.''

Crist responded with a nervous laugh: ``Well, I'm not a doctor.''

Miami Herald staff writer Michael R. Vasquez contributed to this report.