1. IMPACTS OF PROPERTY TAX REFORM January 30, 2007

2. Introduction Randy Singh, Office of Management & Budget –Opening Remarks Bill Donegan, Orange County Property Appraiser –Property Tax Overview –Reform Efforts –The 4 Property Values –“Save Our Homes” Benefits & Portability –Proposed Legislation & Analysis

3. Introduction (cont.) Sara Bleakley – Florida Association of Counties (FAC) –Constitutional Structure –Fiscal Effects of Save Our Homes –Tax Reform Proposals –FAC Proposal –Legal Issues Randy Singh – Office of Management & Budget –Background Information & Fiscal Impacts to Orange County

4. PROPERTY TAX REFORM Bill Donegan Orange County Property Appraiser January 30, 2007

5. IMPACTS OF PROPERTY TAX REFORM January 30, 2007

6. Property Tax Reform Property Tax Reform Efforts “Save Our Homes” Portability Double Homestead Exemption Revenue/Expenditure Caps Impacts to Orange County Summary

7. Property Tax Reform Property Tax Reform Efforts “Save Our Homes” Portability Double Homestead Exemption Revenue/Expenditure Caps Impacts to Orange County Summary

8. Property Tax Reform Efforts Many Proposals Exist for Property Tax Reform The Goal is to Provide Equity & Fairness All Proposals Would Have a Significant Impact on Orange County

9. Property Tax Reform Efforts Statewide Value Removed From Tax Rolls: $25K Homestead Exemption and SOH Differential

10. Property Tax Reform Property Tax Reform Efforts “Save Our Homes” Portability Double Homestead Exemption Revenue/Expenditure Caps Impacts to Orange County Summary

11. “Save Our Homes” Portability Portability Proposals –Seek to Grant the Ability to Transfer an Existing “Save Our Homes” Benefit to a New Property Full Benefit Transfer Partial Benefit Transfer Statewide Transfer Within County Transfer

12. “Save Our Homes” Portability Impact of Full Portability –Transfer of Total Difference Between Market Value and Assessed Value –Tax Rolls Would Grow at a Progressively Slower Rate –Orange County Would Stand to Lose an Estimated $79 Million in Tax Revenues Over the Next 5 Years

13. “Save Our Homes” Portability

14. Impact of Full Portability Over 5 Years –General Fund: ($48 Million) –Capital Projects Fund: ($3 Million) –Parks Fund: ($2 Million) –Fire: ($14 Million) –Sheriff: ($12 Million) –Total: ($79 Million)

15. Property Tax Reform Property Tax Reform Efforts “Save Our Homes” Portability Double Homestead Exemption Revenue/Expenditure Caps Impacts to Orange County Summary

16. Double Homestead Exemption Homestead Exemption –Reduces Taxable Value of a Primary Residence by $25,000 –Current Homestead Exemption Reduced FY 07 Taxable Value by $5.2 Billion in Orange County Alone –Proposals Exist to Double the Exemption to $50,000

17. Double Homestead Exemption Impacts of Homestead Exemption –If the Homestead Exemption Were Already Doubled, the Result Would Have Been a $40 Million Reduction to Orange County’s Budget in FY 06-07 –Over 5 Years the Impact is $200 Million

18. Double Homestead Exemption Impacts of Homestead Exemption Over 5 Years –General Fund: ($125 Million) –Capital Projects Fund: ($5 Million) –Parks Fund: ($5 Million) –Fire: ($35 Million) –Sheriff: ($30 Million) –Total: ($200 Million)

19. Property Tax Reform Property Tax Reform Efforts “Save Our Homes” Portability Double Homestead Exemption Revenue/Expenditure Caps Impacts to Orange County Summary

20. Revenue/Expenditure Caps Aim to Limit Budget Growth of Local Governments Cap Proposals –Limit Expenditures –Limit Revenue Collections –Many Possible Proposals

21. Revenue/Expenditure Caps Effects of a Revenue/Expenditure Cap –Assume a Cap of CPI + Population Increase on Major Property Tax Related Funds –If a Cap were Instituted Last Year, Orange County’s Budget Would Have Been $196 Million Lower in FY 06-07

22. Revenue/Expenditure Caps Possible Effects of a Revenue/Expenditure Cap on General Fund in FY 06-07 - $98 Million

23. Revenue/Expenditure Caps Impact of Revenue/Expenditure Cap Over 5 Years –General Fund: ($307 Million) –Capital Projects Fund: ($41 Million) –Parks Fund: ($38 Million) –Fire: ($64 Million) –Sheriff: ($47 Million) –Total: ($497 Million)

24. Revenue/Expenditure Caps Costs – 1996 vs. 2007 –Health Insurance Costs (257% Increase) 1996 - $15,365,000 2007 - $54,824,000 –Lynx Funding (193% Increase) 1996 - $13,001,900 2007 - $38,042,460

25. Revenue/Expenditure Caps Public Safety O&M Costs – 1996 vs. 2007 –Sheriff’s Office (88% Increase) 1996 – $87,356,670 2007 – $164,099,010 –Corrections (80% Increase) 1996 - $73,949,610 2007 - $133,356,590 –Fire/EMS (215% Increase) 1996 – $47,004,811 2007 – $148,282,370

26. Revenue/Expenditure Caps Costs – 1996 vs. 2007 –Average Annual Salary Increase for Regular Employees 3.58%

27. Revenue/Expenditure Caps Costs – 1996 vs. 2007 –Costs of Insurance, Transportation, & Public Safety Have Increased Significantly While Salary Increases Have Remained Modest –These Increases are NOT Directly Linked to CPI

28. Property Tax Reform Property Tax Reform Efforts “Save Our Homes” Portability Double Homestead Exemption Revenue/Expenditure Caps Impacts to Orange County Summary

29. Impacts to Orange County Property Tax Reform Implications –The Estimated Impact of All Three Proposals if in Place Over 5 Years: Portability = $79 Million Double Homestead Exemption = $200 Million Revenue/Expenditure Cap = $497 Million Total 5 year Impact = $776 Million

30. Impacts to Orange County Property Tax Reform Implications Over 5 Years –General Fund: ($480 Million) –Capital Projects Fund: ($49 Million) –Parks Fund: ($45 Million) –Fire: ($113 Million) –Sheriff: ($89 Million) –Total: ($776 Million)

31. Impacts to Orange County Property Tax Reform Implications –Non-Discretionary Costs Must be Met –Reduced or Capped Revenue Will Mean: Cutting and/or Scaling Back Some County Services Cutting and/or Delaying Capital Projects Such as Fire Stations, Parks, Roads, etc. May Require Millage Rate Increases for Sheriff, Fire, Countywide

32. Property Tax Reform Property Tax Reform Efforts “Save Our Homes” Portability Double Homestead Exemption Revenue/Expenditure Caps Impacts to Orange County Summary

33. Significant Impacts to Orange County’s Budget What’s Next? –Property Tax Reform Committee –Taxation and Budget Reform Commission –Legislature –Ballot Initiatives

34. IMPACTS OF PROPERTY TAX REFORM January 30, 2007