by Mike Sharkey
Staff Writer
A bill defeated last week by the Florida Legislature may have saved home buyers across the state millions of dollars a year.
House Bill 1221 was sponsored by Rep. Chris Smith (D-Fort Lauderdale) and would have created an extra 45-cent document stamp tax on commercial and industrial transactions in Broward and Palm Beach counties. The revenue from that additional tax — the statewide doc stamp rate is 70 cents per $100 in assessed value — would have generated an estimated $62 million that would have gone to affordable housing.
The Florida Association of Realtors vehemently opposed the bill, citing the current Sadowski Act as a viable source of affordable housing funding assistance.
Nancy Garcia, the lobbyist for the Jacksonville-based Northeast Florida Association of Realtors, said the bill was dangerous because it would have set a precedent of allowing local governments to create an additional tax in an effort to raise monies that should already exist.
“The bill had ramifications for here and across the state,” said Garcia, whose association serves Duval, Clay, Putnam and Baker counties. “The bill was going to give Broward and Palm Beach counties the ability to vote on a referendum to create a local doc stamp tax. It would have opened the door for local governments to create an additional doc stamp tax. The Florida Association of Realtors opposed the bill.”
The Sadowski Act was established in 1992 and created a trust fund for those seeking affordable housing assistance.
Garcia said the problem today with the trust fund is not all of the money generated by doc stamps is actually going into the fund. For several years now, state legislators have allocated approximately $193 million a year into the fund.
However, thanks to increasing property values statewide, doc stamps could generate almost $450 million in 2005-06. Garcia said the other $257 million will go into the general fund, which was not its intended purpose.
The recently defeated bill would have created a way to increase the amount that is allocated for the fund at, says Garcia, the expense of those who can least afford it.
“Since 2000, the median price for a home in this area has gone up 71 percent,” said Garcia. “The median income for a family of four has gone up 9.7 percent. In 2004, the family of four needed an extra $36,000 a year in order to get into a median-priced house.”
Garcia said the best solution for the shortfall in the Sadowski Act trust fund is to reappropriate the proper funding from doc stamps collected statewide on a yearly basis. She said it’s not illegal for the money to be diverted to the general fund, but it’s making affordable housing nearly extinct.
“The money is coming into the state, but it’s not going into the fund. It’s legal for them not to allocate all the money to the fund,” said Garcia, adding an even bigger issue arose a couple of years ago. “There was an effort to do away with the fund entirely.”
John Sebree, FAR’s vice president of public policy, agreed with Garcia that a new tax isn’t necessary in order to subsidize affordable housing. The funds, if properly allocated are being collected.
“No one supports affordable housing and home ownership efforts more than Florida realtors,” he said. “With available monies in the housing trust funds, it’s unnecessary to put the burden of funding workforce housing on the backs of certain businesses. Hundreds of millions in doc stamps are already being paid by property owners with the expectation that those funds are supposed to go to affordable housing, yet the money is not going there.”