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Thursday, May 23, 2024

Local budgets may feel effects of Amendment 1

It could be months before the passage of Amendment 1 starts to impact the housing market and local budgets, but meanwhile, many are left to wonder exactly what that impact will be.

The amendment to the state constitution, which passed Tuesday with 64 percent of the vote, cuts property taxes on homes and allows homeowners to take a percentage of tax benefits with them when they move - an option called "portability."

The number of people who will take advantage of that option is impossible to measure, local officials and real estate agents agree, making it equally impossible to gauge the effect it will have in Gainesville. John Howe, a broker for Watson Realty Corp., said even though the stagnant housing market was starting to pick up before the amendment passed, sales are still slow.

"We're not going to see a mad rush of people jumping out into home ownership," he said. "They're still going to be cautious."

Right now, he said, there are 2,500 houses on the market in the Gainesville area - selling at about 10 to 15 a day. Houses that used to sell in 30 days now take three to six months.

Michael Kitchens, executive vice president of Bosshardt Realty Services Inc., said the market increases in early January could have been the result of homeowners anticipating the benefits of portability.

Since the amendment is retroactive, he said, anyone who moved in 2007 is immediately eligible for portability benefits.

As far as how many people would choose to move now, Kitchens said he was still unsure.

"We're only a day into it, so it's hard to tell," he said. "It'll probably take a couple months before we can see what kind of effect it's had."

Local budgets will take a little longer to feel the effect, but officials are equally uncertain of how serious the consequences will be.

County Commission Chairman Rodney Long said cuts could come from fire and police departments, recreation, the jail, the county clerk's office or from layoffs.

"All of that's just pure speculation," Long said.

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County Manager Randy Reid added the possibility of decreases to animal services and aid to outside agencies. Though the county's budget stood to increase by $9.8 million this year, officials are instead facing a $1.2 million net loss.

The city could lose $3.1 million, spokesman Bob Woods said.

But neither of those numbers includes losses from the portability option, which Woods said are impossible to estimate.

Both city and county officials said that budget cuts caused by the amendment will not be felt until the 2009 fiscal year, which starts Oct. 1, 2008. The city commission will start looking at department cuts in the spring, Woods said.

"The process really hasn't begun at this point," he said.

Long said the county will also make formal budget decisions in the spring, but will hold an informal public meeting Tuesday to discuss possibilities.

While the amendment passed with 64 percent in the state, it received only 51 percent approval in Alachua County.

Reid noted that since the values of homes in Gainesville were relatively low compared to other parts of Florida, homeowners were estimated to save a little more than $100 a year, rather than the $240 average projected for the state.

"It wasn't viewed as a substantial savings," he said.

Long said in Alachua County, only 48 percent of property is even taxed - most of it belongs to the state.

"We're not a tax-rich county," he said. "I think most citizens understood what the impact of passing the amendment would be."

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