Three new Florida Web sites make government more accessible
 

TALLAHASSEE, Fla. – March 6, 2007 – Three new Florida Web sites attempt to make state government more accessible, understandable and responsive to insurance problems.

Insurance:  www.fldfs.com/ica
 
Florida Chief Financial Officer Alex Sink joined Florida’s new Insurance Consumer Advocate Bob Milligan on Monday to unveil a new Web site designed to educate Floridians about their vision for the position, as well as provide contact information for consumers with insurance-related questions:

“As I stated during the campaign, I want the Insurance Consumer Advocate to become a household name in Florida,” said Sink. “One of the first steps in strengthening the Insurance Consumer Advocate is educating Floridians about this position and how it serves the people.”

Open government:  www.flgov.com/og_home

The Open Government Web site features a video clip from Gov. Crist’s inaugural speech, in which he announced the office’s establishment. It includes information about Florida’s open government and public record laws for consumers, and links to other organizations that provide public record resources. Visitors can also access the Attorney General’s Open Government Mediation Program and the First Amendment Foundation.

The Office of Open Government Web site also lists state agency contacts charged with ensuring public record and Sunshine law compliance. Agency heads selected these contacts to serve as liaisons to the Office of Open Government. Consumers may also e-mail the Office of Open Government directly from the Web site.

Plain language initiative:  www.flgov.com/pl_home

Gov. Crist wants state documents and publications to be easier to read and understand. To accomplish that, the Plain Language Web site explains the purpose of this initiative and answers commonly asked questions, with examples of before-and-after documents edited to make the language easily understood. Floridians may request a translation of a state government document either online or by fax, and should receive a response within seven days.

Crist also told state agencies to review their communication strategies and then establish new standards and guidelines. As a result, the people of Florida should find future state publications and products easier to use. The Executive Order calls for agency reviews to be completed and procedures to be in place by April 2, 2007.

© 2007 FLORIDA ASSOCIATION OF REALTORS®

GOP: Let county voters pick taxes
 

TALLAHASSEE, Fla. – March 22, 2007 – House Republican leaders have sweetened their pitch to replace property taxes with an increase in sales taxes: Give homeowners the choice of higher sales taxes in their county in exchange for having their property tax bills disappear.

The proposal is part of a new version of the tax overhaul being pushed by House leaders. Along with the choice comes this bottom line: If voters agree to swap local sales taxes for property taxes, they’ll pay no more property taxes. If they don’t agree, they’ll pay an average of 45 percent less in property taxes beginning in the 2008 tax year.

The new plan would still raise sales taxes statewide, but only by a penny, not the previously proposed 2 1/2 cents. But the plan would let counties raise local sales taxes by as much as 1 1/2 cents more – if local voters approve – to make up for major cutbacks on property taxes. The measure would force local governments to cut $5.5 billion statewide by 2008.

“There isn’t a one-size-fits-all solution,” said House Speaker Marco Rubio, who spoke with reporters Wednesday about the new version. “We produced a basic concept of sales tax in lieu of property tax; we figured out the shortcomings and we addressed it.”

Among the problems House leaders want to fix: Complaints by large counties that the original proposal of raising sales taxes statewide might send money raised in one county to another smaller, poorer county.

The new proposal also softens the blow to local governments, forcing them to reduce tax collections based on the 2003-04 budget year, rather than going back to 2000-01, which would mandate deeper cuts.

By giving voters the option of raising their local sales taxes – and having counties distribute the money to their cities based on existing formulas –lawmakers resolve the problem of having to distribute the money, said Rep. Ray Sansom, a Destin Republican and head of the House property tax effort.

House Democratic Leader Dan Gelber said he was encouraged that House Republicans have shown a willingness to modify their plan to fix weaknesses, but he has some questions.

“I’m not convinced the numbers add up,” he said. “I think it’s clear we’re still at the drawing board with these plans.”

The new House Republican plan, which will be voted on in the House Policy and Budget Committee on Friday, would still require a constitutional amendment, which would have to be approved by 66 percent of voters. It would work this way:

• Local spending: Local governments would be forced to cut their budgets an estimated $5.5 billion in 2008, and property taxes would have to be rolled back based on the 2003-04 budget year. Hospital taxing districts, children’s services councils and poorer counties would be exempted from the rollback. Counties could exceed revenue caps only by a unanimous vote of their commissions. In the future, spending would be capped based on the consumer price index.

• School taxes: Homestead property owners would see the portion of their property taxes that pay for schools disappear – a savings of as much as 40 percent for owners of most primary homes. The state would replace that money by raising the state sales tax one cent and distributing the $3.9 billion collected to all 67 counties, based on the existing school funding formula. Owners of commercial and non-homestead property would continue to pay property taxes for schools, but the tax bill would shrink because of the rollbacks.

• Optional school taxes: Counties can now levy a separate tax that goes to schools. Under the new plan, counties would have until 2010 to ask voters to that tax with a half-cent increase in the local sales tax.

• Local taxes: Counties would have until 2010 to ask voters to eliminate all property taxes on primary homes and replace the money with a one-cent increase in the local sales tax.

• Rental property: Counties could be required to pass on tax relief to owners of rental property, though there is no requirement that the savings be passed on to renters.

• Businesses: Commercial-property owners would receive a tax break of $25,000 of tangible personal property paid on certain equipment, such as shelving.

The latest proposal is a variation of a plan first promoted by Republican House leaders three weeks ago, but this is the first time it has been offered as formal legislation.

Rubio has faced resistance from some Republicans, who worry about the wisdom of voting for a tax increase. On Wednesday, Sen. Mike Haridopolos, who is leading the property tax effort in the Senate, said the general House idea of replacing property taxes with sales taxes “doesn’t have the support necessary to carry the day.”

Haridopolos said Senate leaders are taking their time to release their proposal because they want to understand the impact a rollback in government revenue will have.

House Democrats have proposed their own alternative, attempting to give selective property tax relief to lower- and middle-class homeowners.

Gelber said that the new plan would give the richest 65,000 homes in the state – those valued at $1 million or more – more than $1.5 billion in tax cuts.
 

Copyright © 2007 The Miami Herald, Mary Ellen Klas. Distributed by McClatchy-Tribune Business News.

Florida House considers alternative property tax reform plans

TALLAHASSEE, Fla. – March 12, 2007 – As troubles mounted Friday for a House Republican push to overhaul property taxes by slashing local government spending, an alternative plan to swap property taxes for sales taxes began to gather steam.

The idea, offered by Democratic Rep. Jack Seiler of Wilton Manors, is to lower property taxes $7.8 billion statewide by eliminating the portion of tax bills that go to school districts. Voters would then be asked to approve a constitutional amendment to make up the lost revenue by raising the state sales tax 2 cents on the dollar.

Seiler’s plan counters the House Republicans’ two-part proposal to roll back local government spending, eliminate all property taxes on primary homes and replace it with a 2.5 cent sales-tax hike.

Unlike the House idea, which would require massive budget cuts, Seiler’s proposal would not necessitate counties and cities scaling back their budgets. But it would shift more of the responsibility for financing education to the state.

“For the past eight years, we’ve balanced the education budget on the backs of local taxpayers,” said Seiler, the ranking Democrat on the House Policy and Budget Committee. “We can’t blame local government for us shifting the cost to local property taxpayers.”

As property values have risen in recent years, legislators increased the percentage local governments had to contribute to the education budget. From 1999 to 2006, the county share of the so-called “required local effort” increased from 40 percent to 55 percent, Seiler said.

Former Gov. Jeb Bush and the Legislature used the savings to cut state taxes, such as the intangibles tax on stocks and bonds.  The new ideas came as House Republican leaders put the brakes on the plan they had fast-tracked this week.

Mounting concerns

They postponed a vote on the plan until Friday as the House Policy and Budget committee heard a mounting list of concerns from business groups, small counties, cities and legislators – many of them Republicans.

Gadsden County Commissioner Brenda Holt told the committee how she watched as her son died in an ambulance because the county has no hospital and he had to be taken more than 20 miles to Tallahassee.

“What do you mean we have extra money?” she asked.

Representatives from small businesses warned that the House plan was rife with unintended consequences. They feared, for example, that if counties are forced to roll back budgets to 2000-01 levels and cut services, the furor would anger people – and counties would respond by overruling the legislation and eliminating the fix, leaving taxes on businesses higher than they are today.

League of Cities lobbyist John W. Smith endorsed Seiler’s idea to have the state pick up the cost of schools that is funded by property taxes.

Hank Fishkind, an economist for the state’s 67 counties, offered a similar alternative: Raise the sales tax 1.5 cents, eliminate property taxes that pay for schools, and increase the tax on documentary stamp taxes paid on real estate transactions.

Seiler acknowledges that raising the sales tax is not universally embraced as the solution. Democratic colleagues see it as a more regressive tax.

Seiler said he would prefer to raise the sales tax 1 cent and find new revenue elsewhere.  His idea was not rejected outright by House Republicans.

Rep. Stan Mayfield, a Vero Beach Republican and vice chairman of the House budget committee, said he likes Seiler’s plan because it relies on an existing formula for distributing tax revenue back to counties.

Under the House Republicans’ plan, sales tax would be collected by the state and then distributed back to counties based on a to-be-determined formula.

Critics warn it would unleash a budget war between counties even more fierce than the annual showdown over school funding.

“It’s going to make that food fight in Animal House look like Breakfast at Tiffany’s,” Seiler quipped.

Inequities persist

Mayfield noted, however, that Seiler’s plan doesn’t eliminate the inequities in the property tax system caused by the Save Our Homes amendment, under which primary homeowners with similar property are taxed at vastly different rates depending upon how long they have owned their home.

Because the House Republican plan contemplates eliminating all property taxes on homestead property, inequities within Save Our Homes would disappear. However, property taxes would still be levied on businesses, rentals and second homes.
 

Copyright © 2007 The Miami Herald,Mary Ellen Klas. Distributed by McClatchy-Tribune Business News.

Study determines lifespan of new home components

WASHINGTON – March 13, 2007 – How long will a home improvement actually remain an improvement? How long do new wood floors last? New stoves? A new countertop?

A study sponsored by Bank of America Home Equity and conducted by the National Association of Home Builders (NAHB) attempts to quantify lifespan, with a nod to the fact that many factors – use, maintenance, climate, advances in technology and simple consumer preferences – can have a dramatic effect on product longevity. The National Association of Home Builders/Bank of America Home Equity Study of the Life Expectancies of Home Components was conducted in the summer of 2006.

“By polling experts in a wide range of fields, we learned that many home components are expected to last for the life of the house,” says Gopal Ahluwalia, staff vice president for research and surveys in NAHB’s Economics Group. “Among them are toilets, wood floors, all types of insulation, and fiberglass, steel and wood exterior doors. On the other hand, some components have a much shorter life expectancy. Wood decks should last about 20 years, depending on climate, and kitchen faucets should last about 15 years. Linoleum floors have a life expectancy of about 25 years, and furnaces can be expected to last 15 to 20 years.”

“It’s important to remember that the life expectancies for materials included in this study are averages,” says Ahluwalia. A number of other factors can influence it. “For example, the practical life expectancy of kitchen cabinets is about 50 years. However, many people buying a 15- or 20-year-old house would make installing new, updated kitchen cabinets a priority. Likewise, some home owners paint their homes every year or two, even though interior paint has a practical life expectancy of about 15 years.”

According to the study, the life expectancy of a typical appliance varies. Of the major appliances in a home, gas ranges have the longest life expectancy: 15 years. Dryers and refrigerators last about 13 years. Some of the appliances with the shortest lifespan are: compactors (6 years), dishwashers (9 years) and microwave ovens (9 years).

Kitchen cabinets are expected to last up to 50 years, medicine cabinets for 20-plus years, and garage/laundry cabinets for 100-plus years. Closet shelves are expected to last a lifetime.

Natural stone countertops, which are less expensive than a few years ago, are gaining in popularity and are expected to last a lifetime. Cultured marble countertops have a life expectancy of about 20 years.

Exterior fiberglass, steel and wood doors will last as long as the house exists, while vinyl and screen doors have a life expectancy of 20 and 40 years, respectively. Closet doors are expected to last a lifetime, and French doors have an average life of 30 to 50 years.

Copper plated wiring, copper clad aluminum, and bare copper wiring are expected to last a lifetime, whereas electrical accessories and lighting controls are expected to last 10+ years.

Kitchen sinks made of modified acrylic will last 50 years, while kitchen faucets will work properly for about 15 years. The average life of bathroom shower enclosures is 50 years. Showerheads last a lifetime, while shower doors will last about 20 years. Bath cabinets and toilets have an unlimited lifespan, but the components inside the toilet tank do require some maintenance. Whirlpool tubs will function properly for 20 to 50 years, depending on use.

All natural wood floorings have a life expectancy of 100 years or more. Marble, slate, and granite are also expected to last for about 100 years, but can last less due to a lack of maintenance. Vinyl floors last up to 50 years, linoleum about 25 years, and carpet between 8 and 10 years (with appropriate maintenance and normal traffic).

The complete study is free and available in PDF format at http://www.nahb.org/components.

© 2007 FLORIDA ASSOCIATION OF REALTORS®

UF study: The price is right, so buy now
 

GAINESVILLE, Fla. – March 9, 2007 – Hopeful homebuyers in Florida should act now: The price is right as the state’s single-family residential housing market bottoms out, according to a University of Florida study released today.

“If you’re thinking of buying a house, there’s probably not much to be gained by holding out at this point,” says Wayne Archer, director of UF’s Bergstrom Center for Real Estate Studies. “It doesn’t look like prices are going to fall anymore.”

The quarterly survey of experts in the real estate industry completed in January shows that the share of respondents observing a drop in single-family housing prices has dipped, while a growing number find prices staying even with inflation, Archer says.

“We see that as a benchmark,” he says. “When prices maintain the same level as inflation, then we’re probably in some kind of equilibrium. It indicates the market is stabilizing.”

The exception is condominiums, which are overbuilt and prone to speculative and naïve investors, he says.

This is the first time in the UF survey’s five-quarter history that the buyers’ investment outlook for residential development has brightened. It declined for the first three surveys and remained flat for the fourth survey at the end of October, starting to rise only in this latest survey.

Because of the dominance of single-family housing, the findings have far-reaching and potentially optimistic implications for the state’s real estate industry, Archer says.

“You can’t get away from the fact that the single-family housing market is the single largest driver of the real estate market,” he says. “Most brokers and real estate agents are dealing with single-family housing. Most lending is for single-family housing. And single-family housing drives home furnishings. So when it stabilizes, that’s important.”

One possible explanation for the housing market turning the corner is a restricted supply of land for residential development, Archer says. The shortage meant there was less overbuilding than there might otherwise have been, he says.

Condos did not have this land restraint, which is one reason they are overbuilt, Archer says. At the same time, condos are prone to strong speculative swings because they are considered a relatively easy commodity to exchange; it’s not difficult to acquire them in multiple units or to buy contracts on them, he says.

The stabilization of the single-family housing market came earlier than anticipated and is not expected to affect all parts of the state equally, Archer says. The quieter markets likely will take longer to rebound than those in Central and South Florida, where growth has been explosive.

Jacksonville typically has been a slower and steadier market than Orlando, Tampa-St. Petersburg, Miami and other cities in South Florida, but that is changing, Archer says. Recently, the Jacksonville housing market has picked up momentum.

Even with a turnaround, Archer says he does not believe Florida’s real estate market is likely to reach the same level that it did at its peak in 2005-06. “I don’t think any thoughtful person would expect sales to go back to where they were a year or so ago,” he says. “That was probably an overheated condition and it was extraordinary.”

On a positive note, nearly all other markets, including apartments and commercial rental markets, appear to be remaining steady or even experiencing robust growth. “They did not experience a downturn in the same sense that the single-family development market did and they’re continuing to be strong,” Archer says.

Optimism about Florida real estate seems to be particularly apparent among foreign investors. Many respondents commented that foreign investors and lenders are aggressively trying to invest more capital in the state’s rental markets.

“They apparently have no fears about the future of these markets, despite what we perceive as our problems with hurricanes, taxes and other concerns,” Archer says.

For the survey, UF’s Survey Research Center asked a series of questions of 318 industry executives, real estate lawyers, market analysts, title insurers, financial advisers, market research economists, real estate scholars and other experts in the field, an increase over the 183 respondents in the last survey.

More information is available on the center’s Web site, www.cba.ufl.edu/fire/realestate/cres/findings.asp.

Consumer confidence edges up, but housing makes big picture volatile
 

GAINESVILLE, Fla. – Feb. 28, 2007 – Relatively cheap gas prices, a record high stock market and low unemployment all contributed to a rise in Floridians’ consumer confidence by two points to 91 in February, four points higher than at the same time a year ago, University of Florida economists report.

“Consumer confidence among Floridians has been volatile the last couple of months,” says Chris McCarty, director of the survey research center at UF’s Bureau of Economic and Business Research. “There are competing forces acting on the consumer, and it is still unclear how these will play out in the long term. On the positive side, gas prices are still relatively low, although they are headed back up. The stock market hit another record high in February, although it is down from that, and employment remains solid here in Florida, with the unemployment rate quite low compared to previous years.”

The rise in consumer confidence was broad-based, with increases in four of the indexes’ five components. The biggest gain was in perceptions of personal finances now compared to a year ago, which rose four points to 84. Three components rose three points: expectations about personal finances a year from now to 95; expectations about U.S. economic conditions over the next five years to 86; and perceptions of whether it is a good time to buy big-ticket items to 109. Expectations about U.S. economic conditions over the next year remained unchanged at 83.

“On the down side is housing, the focus of everyone’s attention,” McCarty says. “There is no question that we are seeing deterioration in the sub-prime loan market – higher-interest loans to consumers with weak credit histories – and that inventories are up and sales of both new and existing homes are down. Many people ended up buying homes they could not afford.”

The question remains whether the effects will stay within the housing sector, McCarty says. Although housing construction by itself represents less than 10 percent of the U.S. economy, the effect of housing can move into other sectors.

Since the last recession in 2001, consumer spending, which is responsible for about two-thirds of all U.S. economic activity, has been fueled directly by equity withdrawals from housing, he said.

As people’s homes appreciated in value, they felt comfortable arranging cash-out refinancing, home equity loans and home equity lines of credit, McCarty said. But as sales have slowed and homeowners drop their prices to sell, the value of homes in many markets is declining, making consumers less comfortable withdrawing equity from their homes, he said.

“The big questions are how much will consumer spending pull back due to the decline in real estate prices, and if other areas of the economy, such as business investment and exports, can offset a possible decline in purchasing power from consumers,” he says.

McCarty expects the effects on housing to spill into other sectors of the economy by May or June. “This should be more pronounced here in Florida, given the enormous gains in the value of Florida real estate,” he says. “It has much further to fall than other states.”

Many people are looking to the Federal Reserve Board for some relief to this situation, McCarty says. There is a sense among some economists that the Fed is overly concerned with inflation and will lower interest rates before the end of spring, traditionally the most active season for selling homes.

But McCarty believes it is very unlikely that interest rates will fall in the near term, considering recent data on inflation and statements from board members.

The research center conducts the Florida Consumer Attitude survey monthly. Respondents are 18 or older and live in households telephoned randomly. The preliminary index for February was conducted from 466 responses. The error rate is plus or minus 5 percent.

Consumer confidence is designed to help predict buying patterns by measuring the mood of consumers toward purchasing. Although other economic indicators also predict buying patterns, consumer confidence tends to be available sooner. The index is benchmarked to 1966, so a value of 100 represents the same level of confidence for the year. The value of the index is in comparing changes over time rather than looking at an isolated month.

© 2007 FLORIDA ASSOCIATION OF REALTORS