State economist: Expect ‘Intense slowdown’ of property tax collections

Property tax rates face a “near-term … intense slowdown,” says the state’s leading economist.

On Monday, Florida’s Revenue Estimating Conference looked at trends in ad valorem collections, working through competing estimates and refining the five-year taxation outlook.

Expect no massive changes from forecasts given to the Legislature, however.

The forecast regarding new construction is “significantly lower” going forward for non-residential construction overall, with the worst coming in the second half of 2020 and next year.

2021 will essentially see flat growth rates in construction across the board, with more optimism in the outlook for out-years.

These expectations jibe with the theory that a recession looms in the coming year.

Office of Economic and Demographic Research head Amy Baker, while less pessimistic in terms of forecasting growth rates than others in at the table, asserted that a “near-term … more intense slowdown in 2021” seems likely.

Another concern: comparing third-quarters year over year show a decrease in appreciation of housing prices, and expectations are for a 3% to 4% annual appreciation statewide year over year for the next five years.

“When you look at the history, it seems to be trending downward,” Baker added.

Don Langston, from the House, likewise urged a “conservative” appraisal.

Homestead values surged through much of the last decade, but the trend slowed in the last five years. In 2015, the rate was 8.84%; it’s just 4.34% today.

“I don’t want to go higher than the current forecast,” Baker added.

That expects 3.62% appreciation in 2020, 3.37% in 2021, 3.21% in 2022, 3.19% in 2023, and 3.08% in 2024.

“Non homestead residential is not exactly bursting at the seams,” Baker added.

School taxable and county taxable values, however, are expected to continue to see robust growth, with 5% to 6% annual appreciations expected through 2025.