A controversial idea is again gaining ground in the Legislature: eliminating property taxes and replacing them with a new “consumption tax” tacked onto the sales of goods and services across the state.
The change, said Republican Rep. Ryan Chamberlin, would put an end to what some have called “the most hated tax in America.”
“I believe it’s time,” he told members of the House Ways and Means Committee, which voted 15-6 for a measure (HB 1371) Chamberlin is sponsoring to study shifting a huge tax burden from homeowners to consumers.
If passed, the bill would direct the Office of Program Policy Analysis and Government Accountability (OPPAGA) to examine the likely impact. A report would be due Feb. 1, 2025.
Chamberlin, a freshman Republican lawmaker from Belleview, offered two reasons property taxes need to go. The first, he said, is that they create an arrangement under which homeowners never truly own their domiciles.
“We all simply rent it from the state, and as long as we pay those rents, then we can use the property we hold a deed for,” he said. “This is not a tax; it is slavery.”
The second reason, he continued, is that property taxes increase regardless of whether a homeowner sells their house because the rate is based on unrealized gains — an arrangement ludicrous in most other scenarios.
“Think about it. If the IRS started charging us a tax not just on your income but what they thought we could have earned, we would have riots in the streets,” he said. “Yet we get a property tax increase every year on most of our properties in Florida not based on any realized gain in our bank account but based on what the gain could be if we decided to sell it.”
Chamberlin said that if Florida adopts the change his bill contemplates, it would “not just be the most prosperous state in the country (but) the most prosperous economy in the world.”
Some on the panel were less enthusiastic.
Orlando Democratic Rep. Anna Eskamani said local governments would have less incentive to maintain property values under Chamberlin’s proposed tax model. She also noted that state lawmakers shot down proposals like decades ago when U.S. Sen. Marco Rubio and U.S. Rep. Dan Webster served as Speakers in the Florida House.
Webster, she said, “rejected it as not a good idea” because depending too much on a single revenue source, particularly one reliant on spending, is unsustainable in times of economic recession.
“(When) gas costs more, you drive less,” she said. “And honestly, at the end of the day, if you don’t diversify your income (streams), we’re putting ourselves in a place of economic crisis intentionally.”
She suggested a more comprehensive study of tax alternatives, calling Chamberlin’s bill “way too targeted towards what has been already proven by economists, even conservative economists, as not being a smart direction to go.”
Boynton Beach Democratic Rep. Joe Casello — who voted “no” on the bill alongside Republican Rep. Sam Killebrew and fellow Democrats Eskamani, Dianne Hart, Allison Tant and Susan Valdés — worried how the change would affect first responder services.
He also argued Floridians aren’t necessarily losing their homes because of property taxes but because of homeowners insurance, on which a study is more merited.
Valdés added that leaning more heavily on sales tax revenues would disproportionately hurt lower-income residents for whom the cost of goods and services make up a larger portion of their income.
Their sentiments echo local officials’ concerns about a similar proposal in Michigan, where the revenue burden would shift from property taxes to income and sales taxes. An independent 2017 examination of a repeatedly proposed plan in Harrisburg, Pennsylvania, to kill school property taxes determined it would create a windfall for businesses and wealthy school districts while costing middle-class taxpayers more.
According to the Tax Foundation, Florida ranks 26th nationwide in property taxes paid as a percentage of household value (0.91%) and 29th in state and local property tax collections per capita ($1,541).
Property taxes are Florida’s second-largest source of per capita revenue after federal transfers, according to an analysis of U.S. Census data by the Urban Institute, a Washington-based think tank.
West Palm Beach Republican Rep. Rick Roth said he is “beyond excited” about Chamberlin’s measure, which he believes has support from House leadership, including Speaker Paul Renner and Speaker-designate Daniel Perez.
He posited that unburdening properties from taxes would have a multiplier effect, leading to a larger rate of homeownership and more economic security.
“And also, we’ll lower the cost of rental property because the rental property owners won’t have to pay property taxes,” he said.
Deltona Republican Rep. Webster Barnaby heaped further praise on HB 1371, which does not have a Senate companion, according to the chamber’s website.
“We’ve got to be able to live in our homes and one day know that we own the house,” he said. “This is not about how we take care of cities and municipalities. This is about fundamental fairness to Florida taxpayers. Do you own your house? That’s the question. And I want to know that every Floridian that pays their mortgage owns their house.”
House disclosures show the Florida Association of Property Appraisers, Property Appraisers’ Association of Florida, Florida Association of Counties and Osceola County lobbied on HB 1371, which has two more committee stops before reaching a floor vote.