Property Tax Reform Proposals Analysis

1. PROPERTY TAX REFORMUPDATE March 27, 2007

2. Property Tax Reform • January 30, 2007 BCC Meeting • Tax Reform Proposals • Fishkind & Associates • Orange County Budget • County Staff Efforts • Summary

3. Property Tax Reform • January 30, 2007 BCC Meeting • Tax Reform Proposals • Fishkind & Associates • Orange County Budget • County Staff Efforts • Summary

4. January 30, 2007 BCC Meeting • Presented Reform Proposals • “Save Our Homes” Portability • Double Homestead Exemption • Revenue/Expenditure Caps • Possible 5-yr Fiscal Impacts of those Proposals: approx - $776 Million

5. Property Tax Reform • January 30, 2007 BCC Meeting • Tax Reform Proposals • Fishkind & Associates • Orange County Budget • County Staff Efforts • Summary

6. Tax Reform Proposals Governor’s Plan

7. Tax Reform Proposals • Governor’s Proposals • Make “Save Our Homes” Benefit Portable • Double Homestead Exemption & Index to Inflation • Cap Assessed Value Increases to 3% Annually for ALL Properties • Exempt First $25,000 of Tangible Property from Taxation

8. Tax Reform Proposals • Governor’s Proposals • “Save Our Homes” Portability • Grant the Ability to Transfer an Existing “Save Our Homes” Benefit to a New Property • Tax Rolls Would Grow at a Progressively Slower Rate • Orange County Would Lose approximately $79Million in Tax Revenues Over the Next 5 Years

9. Tax Reform Proposals • Governor’s Proposals • Double the Homestead Exemption to $50,000 & Index to Inflation • Would Reduce Orange County’s Budget by approximately $40Million • Over 5 Years the Impact is approximately $200 Million

10. Tax Reform Proposals • Governor’s Proposals • 3% Assessed Value Cap for ALL Properties • Aims to Provide Tax Breaks to All Property Owners Including Large Corporations • Impact of approximately $892 Million to Orange County Over Next 5 Years

11. Tax Reform Proposals • Governor’s Proposals • 5 Year Impact of Governor’s Proposals • Small Business Exemption $ 5 Million • Full Portability $ 79 Million • Double Homestead Exemption $200 Million • 3% Assessed Value Cap $892 Million • Total Approximately $1.2 Billion

12. Tax Reform Proposals House Plan

13. Tax Reform Proposals • House Proposal • Phase I • Roll Back Millage Rates to 2004 Plus CPI and New Construction • Cap Future Annual Property Tax Growth to CPI and New Construction - Requires unanimous vote to change - Revenue Sharing Implications • Provide a $25,000 Exemption on Tangible Personal Property Taxes for Businesses

14. Tax Reform Proposals • House Proposal • Phase II – Two Components • Replace State Imposed School Property Taxes (Required Local Effort) on Homesteaded Property with 1 Cent Sales Tax Increase • By 2010, Countywide Referendum Must be Held to Give Residents the Choice to Replace All Remaining Homestead Property Taxes with up to an Additional 1.5 Cent Sales Tax Increase • 0.5 Cent for School Taxes • 1 Cent for County, Municipalities, & Special Districts

15. Tax Reform Proposals • House Proposal • Fiscal Impact – Phase I • Approximately $130 Million • Fiscal Impact – Phase II • No Impact First Year

16. Tax Reform Proposals • Historical Growth: Property Tax Revenue Compared to Sales Tax Revenue (Adjusted for Article V)

17. Tax Reform Proposals • House Proposal • “If local governments don’t embrace it [the house proposal], they could face much harsher changes.” • House Speaker Marco Rubio Orlando Sentinel - March 15, 2007

18. Tax Reform Proposals Senate Plan • ?

19. Tax Reform Proposals • Senate Proposal • A Plan is Expected in the Coming Weeks • “There is no support in the Senate for increasing the state’s sales tax, effectively declaring the measure dead in that chamber” • Orlando Sentinel – March 21, 2007

20. Property Tax Reform • January 30, 2007 BCC Meeting • Tax Reform Proposals • Fishkind & Associates • Orange County Budget • County Staff Efforts • Summary

21. Fishkind & Associates • Counties have Experienced Major Cost Increases for: • Fuel • Health Insurance • Property Insurance • Pensions • Constitutional Officers (Courts, Sheriff, etc)

22. Fishkind & Associates • A Majority of Additional Ad Valorem Revenue in Counties has been Spent on Public Safety • Spending Growth in Other Areas Attributed to Inflation & Population Growth

23. Fishkind & Associates • No Evidence of Large Increases in Staff • No Evidence of Extravagant Spending

24. Fishkind & Associates • Cost of Government: Budget per Capita

25. Fishkind & Associates • County Employees per 1,000 Population

26. Property Tax Reform • January 30, 2007 BCC Meeting • Tax Reform Proposals • Fishkind & Associates • Orange County Budget • County Staff Efforts • Summary

27. Orange County Budget • Preparation of Two-Year Budget is Continuing • Departments are Preparing for Budget Cuts • Letters Sent to Constitutional Officers and Outside Agencies Regarding Possible Funding Cuts • Final Decision on Budget Adjustments is Pending

28. Property Tax Reform • January 30, 2007 BCC Meeting • Tax Reform Proposals • Fishkind & Associates • Orange County Budget • County Staff Efforts • Summary

29. County Staff Efforts • Taking a Proactive Approach: • Analyzing Proposals • Determining the Impact of Tax Reform Proposals as they are Received • Discussions with Stakeholders • Florida Association of Counties • Florida League of Cities • Orange County Council of Mayors • Standing Meeting with Orange County Cities

30. County Staff Efforts • Taking a Proactive Approach Contd: • Delivering Informative Presentations • West Orange Chamber of Commerce • Central Florida Hotel & Lodging Association • Police Benevolent Association • Orange County Sheriff’s Office • Various Orange County Departments

31. Property Tax Reform • January 30, 2007 BCC Meeting • Tax Reform Proposals • Fishkind & Associates • Orange County Budget • County Staff Efforts • Summary

32. Summary • Current Proposals will have a Significant Impact on Orange County • Budget must be Balanced • Level of Service will be Reduced in Certain Areas • Staff will Continue to Monitor All New Developments

33. IMPACTS OFPROPERTY TAX REFORM March 27, 2007