The Emergency Services Surtax (ESS) is shady right out of the gate. Immediately it’s being justified with some very questionable claims. That alone makes me very suspicious.
Monroe County’s fire service is much more expensive than any other entity in the Keys. Why? And why should Keys-wide taxpayers subsidize it? I submitted two public records requests to try and find out.
In this post, I’ll try to get to the bottom of how much non-locals (tourists, seasonal visitors, out-of-county property owners) contribute to property taxes. It’s not zero, of course, contrary to what the county claims in it’s “white paper”.
I’m using a property appraiser file from August 2014. To sort this out, I categorized the 90,000 or so parcels into four broad categories.
- Residential properties. These properties are not 100% owned and/or occupied by locals. Data obtained from the Census Bureau’s American Fact Finder tool indicates that about 54% of housing units in Monroe County are “occupied” – that is by people who live there year-round. The remaining 46% are “vacant” and over 18,300 of those are specifically identified as seasonal/vacation properties.
- Residential apartments. These are large apartment buildings. The vast majority of these are owned by out-of-county owners. Since rents are demand driven, it is highly unlikely that any property tax break would be passed on to the tenants. Therefore, I assumed that 100% of the property tax on these properties are paid by non-residents, and any property tax break would accrue to the non-resident owners.
- Hotel/Timeshare. These properties derive their income from tourists. As with “residential apartments” the majority have out-of-county owners. Therefore, I assumed that 100% of the property tax is paid by non-residents; and any property tax break would accrue to non-resident owners.
- Commercial/Other. These include business, non-profit and government properties. Business properties constitute nearly all of the taxable value in this category. To estimate the amount that might come from locals versus that which might come from non-residents, I used the county’s sales tax split of 40%/60%.
That’s my reasoning; and here’s the table I came up with.
Local residents definitely pay quite a bit less than 100% of the property taxes – about 47%. In fact, according to my estimate, they pay less than half. I didn’t take the homestead exemption into account so it’s a bit less even.
Based on these numbers local residents wouldn’t see any significant overall benefit from Carruthers’s proposed “tax shift”. There would certainly be “shifts”, but the county is definitely trying to hide the true nature of those “shifts”.
- As discussed here, the sales tax generating areas of Key West and Key Largo would wind up paying for the lion’s share of fire service. So that’s a geographical “shift” that burdens those areas.
- Low to moderate income residents would also contribute higher percentage of their income to the sales tax.
As far as I know, the county has done zero analysis on the true impact of this “tax shift”. At this point, it seems to be about running another scam on the taxpayers.
One thing’s for sure, high value properties with out-of-state owners will be the big winners in all this. More information on that to come.