THE NEWS SERVICE OF FLORIDA: Appraised Values, Tax Consequences of Spill Relief, Up in Air

The following article was published by The News Service of Florida on July 8, 2010:

By MICHAEL PELTIER
THE NEWS SERVICE OF FLORIDA

THE CAPITAL, TALLAHASSEE, July 8, 2010… Oil flowed throughout state government Thursday as multiple players chimed in on the worst man-made environmental disaster to befall Florida’s Gulf of Mexico coast.

In separate actions, Gov. Charlie Crist called for a special session aimed at a constitutional ban on offshore drilling, while Democratic gubernatorial hopeful Alex Sink urged the federal government to leave lost income payments alone when tax times rolls around.

 Meanwhile, local government and business groups met with state officials to map out strategies for tracking the mounting costs of the BP Deepwater Horizon spill that continues to spew oil in the gulf and may alter the economics of the region for years to come.

Local governments, which have so far spent millions on protective measures and clean-up efforts, face plunging property values that, in turn, may further reduce the cash flow needed to pay for the schools, roads and other local responsibilities funded with property taxes.  Somehow, they want to be repaid.

“This is a nightmare in slow motion,” said Greg Brown, Santa Rosa County property appraiser. “This is going to be with us for a long time.”

Leading off a flurry of oil-related activity, Crist called on lawmakers to return July 20 to craft a proposed constitutional amendment to ban oil and gas exploration in state waters. That’s likely to set up a standoff with reluctant Republican lawmakers, who have balked at the idea and led opponents of the no-party governor to call it a politically-motivated grandstand.

“Politics has nothing to do with this,” Crist said. “This has everything to do with what is right for a place that I love.”

Speaking to reporters, the governor said he’s no longer going to wait for consensus before calling lawmakers back into session, saying that time is running out for voters to address the issue during the Nov. 4 general election. Sixty percent of voters would have to agree to pass the proposal.

“They ought to have an opportunity, the people, to put it into their constitution so if a Legislature comes along and forgets what’s happening out there this year, that that doesn’t happen again,” Crist said.

Earlier Thursday, business and local government representatives underscored the difficulty in tracking just how much the BP oil spill has cost public and private entities and how long those adverse impacts will linger.

Among the immediate questions posed to the Oil Spill Economic Recovery Task Force working group were how the spill will affect property values when they are assessed again in January and what property owners will do when they get their tax notices in August. The working group is formulating a slate of recommendations for the full task force.

Property tax levels are based on the January 2010 assessed values, which may have fallen since the spill began April 20. Property owners who think the values are inaccurate have the right to address their local adjustment board, which may see a significant uptick in appeals this fall.

“I think you’re going to see a lot of people challenging their assessments,” Brown said.

While local governments look for a way to boost tax revenue, Chief Financial Officer Alex Sink, the leading Democratic candidate for governor, sent a letter to members of Florida’s Congressional Delegation asking them to support legislation that would waive the federal income tax on the lost income payments Floridians have received from BP. Those payments, which have so far totaled more than $25 million in Florida, should be considered tax exempt as residents struggle to get back on their feet, she said.

“Every dollar counts right now as many Floridians struggle to get by because of the oil disaster, and this common-sense measure just makes sense for our citizens and businesses,” said Sink. “BP should pay for this income tax loss, instead of taking much needed resources from our small business owners and other Floridians.”