Inside Florida's 'Tax Revolt'

The higher taxes have their roots in a real estate market that began booming in 2004.

"Our sales prices for properties in 2004 to 2005 skyrocketed," said Parrish. "I mean there were bidding wars to pay more by buyers than the sellers were asking."

Then came the hurricanes. "Katrina came in the fall of 2005 and that slowed it back and then Wilma hit in October 2005 and devastated south Florida and Broward county," said Parrish. "People as far as 20 miles from the ocean had lost their roofs, fences — all sorts of damage."

All of a sudden, property owners were facing a double whammy: high taxes and higher insurance payments.

"The first insurance renewal premiums after Wilma skyrocketed…tripled, doubled, quadrupled. Scared people…" said Parrish. "The tax bills that people received in 2005 and 2006 were astronomical."

Hitting Bottom

After the hurricanes, the market cooled off quickly, and in Miami, a glut of unsold condominiums hangs over the city like a dark cloud.

"Yes, the real estate market was devastated," said Parrish. "Absolutely, the market was devastated, it hit bottom."

Now, the stalled real estate sales are also dragging down businesses that depend on housing just as their property tax bills have also shot through the roof.

All this has led Florida legislators like Rubio to consider radical changes. "I think the property tax is a horrible way to tax people," he said.

Rubio proposes eliminating the property tax and replacing it with a higher sales tax, an idea that ran into trouble when Democrats argued it would give the biggest breaks to the wealthiest homeowners.

Across Florida, local governments like the city of Delray Beach in Palm Beach County that have been raking in big bucks are now bracing for big budget cuts.

"I'm not saying we can't do without any of it," said David Harden, Delray Beach's city manager. "Think about your own family situation. How would you manage if your income suddenly dropped by 25 percent."

Some Cities Threaten Pushback

The city has already published a "hit list" of services it is threatening to reduce or eliminate if property taxes are cut back. That list includes nearly two dozen cops, fire station cutbacks, a brand new library, swimming pools, and even lifeguards at the beach. Rubio said he doesn't endorse these actions.

"That would be like my wife saying we're going to cut diapers and baby formula if I were to get a pay cut yesterday. Those are the last things you cut. And it shows what's wrong with the system," he said.

But would the Feldman family be willing to accept fewer services, poorer schools, or fewer firemen in exchange for lower taxes?

"Well, I don't know if our school systems could get any poorer," said Laurie Feldman. "And I have to ask the government, 'Where are all those tax dollars going?' A lot of my friends and neighbors are moving, reluctantly, to other states when they would prefer to stay here. And they can't afford it."

So, one way or another, the costs of living in paradise are going up. The painful choices ahead point to a showdown in the Sunshine State. And the bigger question is how far the tax revolt now under way there may spread.

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