The use and abuse of acronyms and backronyms in American politics is generally a trivial subject. We seem to desire one-word answers, but also to suggest that they contain a certain amount of formal depth. The “Tea Party” movement that gained considerable traction around 2008 was initially named in reference to the Boston Tea Party, but later acquired the backronym “Taxed Enough Already”.
■ The concept was popular in the abstract -- who wants to pay higher taxes? -- but it had a poisonous effect on popular opinion that continues to this day. Florida voters just approved Amendment 3 by a 62% majority. Amendment 3 changes the state constitution to exempt the first $250,000 in homestead property value from local taxation in 2028, with adjustments for inflation to follow indefinitely.
■ Property taxes will still apply to school funding, but the rest of what municipal governments spend from property tax revenues will be affected. The state’s own analysis suggests that the change will short local governments by $12 billion a year within the next 5 years. Yet they will still have to fund a laundry list of priorities.
■ As a general matter, nobody likes property taxes. Everyone pays them (renters do so indirectly, but the cost is still there), and they fall largely outside the control of the taxpayer (who cannot do much more than protest an assessed valuation).
■ But local government is also the site of possibly the purest level of taxation: You pay for a bunch of things you see directly, like streets, police service, fire protection, and often public works like water, wastewater, and stormwater management. These things are expensive to manage, but they’re much cheaper to manage municipally than on a household-by-household basis. Imagine hiring a snowplow to care for 150 feet of frontage at a time -- it’s like Chicago-style “dibs”, but magnified.
■ Philosophically speaking, if taxpayers are not willing to pay for the things that sustain a basic community, then what hope is there for self-government? An orderly, sustainable funding alternative has to be found if municipal work is to function normally. Basic services aren’t cheap, but they are usually much cheaper when organized and managed in bulk than not. And the fundamental cost structure isn’t going to improve; Baumol’s cost disease essentially assures us that goods and services that depend heavily on performance by people (like most municipal services) are bound to become relatively more expensive with time. Florida will need more than sunshine and good luck to make the new rules work.
Property taxes are the worst, except for all of the alternatives.