Amendment 2

Title on Ballot: Veterans Disabled Due To Combat Injury; Homestead Property Tax Discount

Sponsor/Originator: The Florida Legislature

What it would do:

This amendment would allow certain disabled veterans, who were not Florida residents prior to entering military service, to qualify for a discount on their property taxes.

If You Vote Yes:

A “yes” vote means you want the state to give a property tax discount to disabled veterans who moved to Florida after entering the military.

If You Vote No:

A “no” vote means you do not want to extend the tax discount to disabled veterans who moved to Florida after entering the military.

Click here to visit the Florida Division of Elections Background on Amendment 2 (including full text of the amendment)

Summary of Amendment (from Division of Elections site):

Proposing an amendment to Section 6 of Article VII and the creation of Section 32 of Article XII of the State Constitution to expand the availability of the property discount on the homesteads of veterans who became disabled as the result of a combat injury to include those who were not Florida residents when they entered the military and schedule the amendment to take effect January 1, 2013.

Arguments for:

Supporters say this amendment will benefit older veterans who were injured in combat but did not live in Florida at the time they entered the military. They say the property tax discount can help with medical bills and may allow veterans to stay in their homes longer as they age. It might also stimulate the housing market by persuading veterans to move to Florida.

Arguments against:

Opponents say state and local governments face mounting budget shortfalls in part because of diminished property tax returns brought about by the collapse of the housing market. Schools and local governments need to maintain the tax base or consider cuts to public services.

Should disabled veterans who move to Florida get a property tax discount?

Amendment 2 relaxes the eligibility requirements for an existing property tax discount offered to disabled veterans. Currently, disabled veterans who meet the following four requirements are eligible for a property tax discount commensurate with the degree of their disability: 1) current Florida resident; 2) 65 or older; 3) disabled in combat; 4) Florida resident when they entered the military. If passed, Amendment 2 would eliminate that fourth eligibility requirement.

As an example of how the current disability discount works, a veteran eligible for the discount with a 50 percent disability can claim 50 percent off the assessed value of his home. Roughly 1,200 veterans received that discount in 2010, allowing them to subtract, on average, $24,000 from their home’s value before property taxes were calculated.

This proposed amendment would give that same tax break to veterans, age 65 and older, who were disabled in combat but living in another state when they entered the military so long as they now claim Florida residency. It is difficult to estimate how many disabled veterans would qualify for the discount under the relaxed standards, but the state estimates that the tax revenues school districts and local governments would lose if Amendment 2 passes is roughly $15 million combined over the first three years.

State lawmakers say the cost is worth it. “This bill provides relief to our state’s aging combat-injured veterans,” state Sen. Mike Bennett, R-Bradenton, said in a press release. “Our older veterans made great sacrifices for our country, although many did not live in the Sunshine State at the time they entered the military. As they age and struggle with service-related disabilities, this bill will help alleviate their financial challenges.”

The measure won unanimous approval in the state Senate and House. There is no known organized opposition to the proposed amendment. As with all proposed amendments, passage requires the approval by 60 percent or more of the voters. If passed, Amendment 2 goes into effect on Jan. 1, 2013.

Current Law

Florida has a long history of offering property tax breaks to its permanent residents. One of those tax breaks allows a homeowner to claim a $50,000 tax exemption on their primary residence, what is commonly known as a homesteaded property. That amount is subtracted from the assessed value of the home before property taxes are calculated, thereby reducing the tax bill. This form of tax relief is reserved for primary residences, meaning the owner must live in the home the majority of the year and not claim any other residence as a primary residence.

Additionally, the state offers several property tax breaks to military veterans disabled while in the service:

- Veterans of any age with at least a 10 percent disability incurred while in active military service (no matter where they lived when they entered the military) can deduct $5,000 from the value of their property before taxes are calculated (in addition to the $50,000 exemption offered to all owners of homesteaded property).

- As mentioned earlier, disabled veterans 65 and over who were Florida residents when they entered the military can also receive a tax break equal to the percentage of their disability (in addition to the $50,000 homestead exemption and the $5,000 disability exemption for those eligible for both).

- And veterans with a service-related, total (100 percent) and permanent disability are eligible for total relief from all property taxes on their primary residence.

As an example of how these current tax breaks might apply, a veteran with a primary residence assessed at $200,000 who was a Florida resident when he entered the military and who is 65 or older with a 50 percent disability related to combat, could claim $55,000 in exemptions and claim 50 percent off the remaining $145,000 assessed value, resulting in an assessment on that property for tax purposes of $72,500.

Estimated Impact

According to a Florida House of Representatives’ staff analysis, 1,206 veterans received the discount on property taxes equal to their combat-related disability in 2010, amounting to a combined discount of $28,749,630. On average, the discount allowed those disabled vets to subtract $23,839 from their home’s value before property taxes were calculated.

It is difficult to say how many disabled veterans would be eligible for the property tax discount if Amendment 2 passes and expands the law to include those who moved here from other states. According to the House of Representatives’ analysis, there were 77,535 veterans in Florida age 65 and older receiving compensation for service-related conditions in 2010. However, “the number of veterans in this population who were 65 or older by exact disability rating percentage category, the number who were Florida residents at the time of entry into military service and the number of veterans whose compensation is the result of combat are indeterminate at this time,” the staff analysis said.

According to the state’s Revenue Estimating Conference (REC), if passed Amendment 2’s estimated impact on school taxes during fiscal year 2013-14 would be a combined $1.1 million in school districts across the state, $2.3 million in fiscal year 2014-15, and $3.6 million in fiscal year 2015-16. That’s an estimate of the combined revenue school districts would not collect if the amendment passes.

If passed, the impact on non-school property tax revenues is expected to be $1.3 million in fiscal year 2013-14, $2.6 million in 2014-15, and $4 million in 2015-16, the REC estimates. That’s an estimate of the combined revenue local government agencies that levy property taxes would not collect if the amendment passes.

IF YOU VOTE YES: