Like every other state, Florida has a myriad of state and local taxes levied on taxpayers. This is a brief overview on how Florida stacks up to other states on taxation. According to statistics compiled by Florida TaxWatch, the State of Florida ranks 49th in the collection of taxes when compared to sister states.
The result is that Tallahassee collects very little from each Floridian to run the state government. Do we have an efficiently run state government? It is better than many others. It is also true that Florida provides fewer services to their citizens and fewer resources to localities. Further, localities are tasked with paying more of the cost of government than cities and counties in other states.
Without an income tax, the state must rely on other revenue sources to fund state government. Florida ranks 45th in state and local taxes per capita. Texas, another example of a large state with no income tax, ranks 31st in that category.
However, Florida ranks as 1st in the nation when it comes to relying on local revenue to fund the government. 54.6% of all government revenue comes from cities and counties. This is 22% over the national average. That would bear out what many local officials have said for years which is that Florida places greater mandates on localities than other states to fund more of government.
Since there is no income tax, the sales tax is what funds state government to a large degree. Sales tax in Florida ranks 12th per capita in the nation while document stamps and stock transfer fees are 3rd highest. Florida ranks 24th per capita in the nation in property tax collections which is just above the median.
Income taxes levied at the federal and state level are, for the most part, complex with many exemptions and progressive rates. Similarly, Florida’s property tax system is so riddled with exemptions and caps that no two homes of equal value pay the same amount.
The loopholes that are found in federal and states income tax codes have been adapted to Florida property taxes. Since property taxes are used to fund local government, the state legislature has been only too eager in increasing those loopholes. This limits localities from instituting a true ad valorem system as real estate taxes were meant to be.
This places cities and counties in the unenviable position of funding the local government and at the same time a large share of unfunded state-mandated requirements. Much of these requirements are picked up by state governments in other places. This has made property tax fairness a real issue.
Do Floridians want more government services and are they willing to pay for them? New York, with the distinction of paying the highest per capita taxes, collects $10,187 in state and local taxes while Florida ranked 45th collects $4,007 per capita. The national average is $5,690. New York has a myriad of government services that Florida does not.
I would say that most Floridians are not looking for greater services. Though the lower down the economic scale you descend that probably is not true. According to the nonpartisan Florida Policy Institute, the state ranks 45th in economic well-being, 24th in education, 40th in health and 33rd in family and community well-being.
If Tallahassee expects local governments to provide many of the services that are state-provided elsewhere, the legislature must give the tools to do so. Instead for the past decade, Florida has been at war with their local governments. It may be good politics with some voters but poor policy.
All taxpayers need to remember there is no such thing as a free lunch.
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