by Michele Newbern Gillis
Staff Writer
Mention of a transfer tax sparked a heated debate between Realtors and St. Johns County Commissioner Bruce Maguire at last month’s Ponte Vedra Council Breakfast held at Sawgrass Country Club.
Maguire attended the breakfast to speak to the Realtors on a possible property transfer tax as well as other alternatives to raising money for St. Johns County.
“I want to talk about growth,” said Maguire, who is also a Realtor. “We are one of the fastest growing counties in the state. That growth has put several demands on the system, which we are having problems trying to satisfy. The school board is one of the big issues and the second is transportation. I want to focus on transportation because the County Commissioners have nothing to do with the school board.”
Maguire discussed either imposing a gas tax, sales tax, transfer tax or continued, but higher impact fees to fund capital improvement projects in St. Johns County.
The Realtors wanted to know why they needed more money and Maguire explained that expenses are growing a lot faster than they can get money.
“One, we as a county spend too much money,” he said. “We need to tighten our belt and we recognize that. There are some things we cannot change. The state mandates that we do certain things. Our worker’s compensation, healthcare, the retirement system and insurance have gone up the last two years.”
Maguire said he expects that the County Commissioners will agree to raise impact fees sometime this year.
If the County Commissioners can raise the impact fees to raise money, why go any of these other routes?
“It has been proven that impact fees by themselves still don’t handle the problem,” said Maguire. “Impact fees are a one-time shot. Once you pay it, it’s over with. The bad part is that if a Realtor sells a house to a family with one child and five years later that family moves and the house sells to a new family with five children. The impact fee paid five years previous cannot cover the impact that new family brings to the area.”
Maguire asked how does the county handle continual turnover and continual demand on the system?
Transfer tax was his suggestion.
“Every time the property sells, there will be a fee to the seller,” he said. “The new owner picks up the impact the next time it sells. It could be five cents on the dollar or one percent no one knows how much it will be. But, idea is that every time that house turns over and a new family comes in, there is an impact. It’s not the house, but the family moving in.”
According to Maguire, the property transfer tax would be based on the value of property. Because property values are always increasing, the tax could generate more revenue each year.
He was not greeted with open arms, to say the least.
Realtors at the meeting argued that the transfer tax was not fair and that they feel a sales tax would be a more equitable way to raise money for the county.
“Your philosophy on the transfer tax is completely wrong,” said George Spohrer of Ponte Vedra Beach Realty. “First of all, your understanding of the real estate closing is all wrong. The buyer pays for everything. The buyer is the only one who brings money to the closing. You are using an argument on re-sale properties that we might have one child in a family that is selling and four children in a family that is buying, therefore we increase the impact and that is simply not true.
“If that were true we should have a seller with four children and a buyer with one and they should get a rebate of impact fees. The real cost is what is going on in the Western part of the county, all of the new development.
“You keep saying impact fees will reduce growth. You guys couldn’t stop growth in this county if you put up roadblocks. It is coming and everyone knows it. Those fees are going to impact us because now you are shifting this to us. No one is going to get it more in the teeth than real estate brokers. If you get our support, then you are one heck of a salesman. Every transaction, now we are going to have document stamps, title insurance and transfer tax. I wish you good luck with that.”
Other Realtors voiced their opinion against the transfer tax, but Maguire said he enjoyed the Realtor response at the meeting.
“The reality is that once people get used to it, they don’t complain anymore. It’s the initial shock that gets them. The initial introduction to the tax is the one that bites the hardest. After that, you see an acceptance, a gradual acceptance,” he said.
The County Commissioners have the power to impose a gas tax or a higher impact fee.
“The transfer tax requires a change in the state law by the state legislature,” said Maguire. “There is already a bill in Tallahassee to allow counties to impose a transfer tax fee. If it goes through at all it will be changed from what it is now. The question is will it go through this year or next year. I think it will go through eventually.”
Maguire said that if they had imposed a transfer tax last year of one percent, they could have raised $22 million.
The way the bill stands now is that the transfer tax would only be imposed on the sale of a home starting on second time it sells and from then on.
“That’s the proposal, but I expect that to change,” said Maguire.
In order to have a sales tax, it would be a similar situation to the Better Jacksonville Plan where the County Commissioners would have to agree to put it on the ballot and then have six to eight months to market it to the general public who would then vote on it.
He said that he thinks it would be put on the ballot after the November election and then be voted on in a special election sometime next year if it even happens.