The booming real estate market could give the city of Jacksonville a roughly $90 million increase in new property taxes, which preliminary figures show is twice the annual growth the city has seen in recent years.
City Councilman Danny Becton, vice chairman of the council’s finance committee, revealed the magnitude of the expected tax jump as he unsuccessfully lobbied for a resolution calling for Mayor Lenny Curry to use a lower property tax rate when preparing the 2022-23 budget.
The city has used the same property tax rate since 2013. Even if the tax rate doesn’t change for next year’s budget, many homeowners will see larger jumps in their debt compared to previous years as the taxable value of their homes and businesses increases at a faster pace.
Becton said this will make it harder for residents and business owners to keep up with other inflation-hit expenses.
“It’s a domino effect that has to be addressed somewhere and if taxes go up then that cost just gets passed on to consumers,” he said.
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The city council rejected Becton’s resolution on Tuesday by a vote of 16-3. Rory Diamond and Al Ferraro joined Becton in urging Curry to use the rollback tax rate, which would lower the base tax rate.
The resolution would not have been binding on Curry, but Becton said it would send him a political signal about where the council stands.
The Curry government told councilors during committee meetings last week that Becton’s resolution was premature as Curry was still working on his proposed budget, which he would present in July.
“Honestly, you’re urging us to do something unnecessary because as soon as we hand it over [the budget] All of you, you can do whatever you want and we will work with you on this process,” said Chief Administrative Officer Brian Hughes.
No change in city tax rate since 2013
The city has had the same property tax rate of $11.44 per $1,000 of assessed taxable value for nine consecutive years. Curry has used this tax rate in every budget he has presented since becoming mayor in 2015.
For the owner of a $150,000 home with a $50,000 exemption for the homestead, the current tax rate equates to a city tax of $1,144. Other property taxes, such as for schools, are not included.
While the city’s tax rate has remained the same, the growth of the tax base has allowed the city to generate more property tax revenue each year without increasing the tax rate.
The taxable value for real estate in Jacksonville — excluding the beaches and Baldwin — totaled approximately $70.6 billion as of June 1, 2021, a year-over-year increase of 5.6%.
The final balance sheet in October 2021 put the taxable property value at $71.9 billion. The real estate appraiser’s preliminary forecast for this year shows growth to just over $80 billion, an increase of 11.3%.
According to Becton, the city has historically collected about $40-$45 million more in property taxes each year, but that will increase to about $90 million for the 2022-23 budget based on the current tax rate and early projections for the amount of the tax base.
The hot housing market has helped spur tax base growth as new builds come online and existing homes sell.
The average selling price for a single-family home in Duval County in January was $291,500, a 24% increase from January 2021, according to a USA TODAY Network localized analysis using data from Realtor.com.
The Save Our Homes amendment to the state law will protect homeowners with homestead exemptions from the full impact of increases in market value when it comes time to pay property taxes, but protections will be less than in years past.
Save Our Homes limits the annual increase in the appraised value of such homes to 3% or the annual rate of inflation, whichever is less. Last year the cap was 1.4%, but given rising inflation, the cap will be 3% this year.
The cap means that even if the city maintains the same tax rate, homeowners covered by Save Our Homes will not increase their property taxes by more than 3%, regardless of how the housing market has escalated home prices.
Non-homestead properties don’t have the same protections, so their owners will see the hot market having a greater impact on how big their tax bills are.
The city has not yet calculated how high the rollback rate will be for the coming year. The rollback rate is the property tax rate that collects the same amount of tax as the previous year without the value of the new construction.
Had the city approved the rollback rate last year, it would have lowered the tax rate from $11.44 per $1,000 to $10.94 per $1,000, a rate reduction of about 4%.