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Date of Issue: August 11, 2005

CART gets push from county commission

The long-awaited report by the Coalition Against Runaway Taxation on the effects of rising taxes on Anna Maria Island businesses received a boost from the Manatee County Commission at its Aug. 2 meeting.

County commissioners agreed to put a staff group together to study the report and the feasibility of limiting hotel/motel property taxes to a maximum 3 percent annual increase.

CART president Don Schroder hailed the commission move as the first step toward halting the "runaway taxation" on the Island that has forced many "mom-and-pop" motels to sell out to condominium developers, rather than continue to pay annual property taxes that in some cases have doubled and tripled the past three years.

"The Island business community is tourism-based, and cannot survive on the relatively small base of full-time residents," Schroder said in the report.

As more and more businesses close their doors and are converted to condominiums, the "viability" of the Island as a tourist destination is reduced.

If tourists are no longer able to find accommodations, shopping and restaurant facilities on the Island, they will migrate to other areas, said Schroder, citing an independent study in Pinellas County.

That study concluded that while the county would not enjoy any reduced taxation revenues in the short-term from condominium conversion, the long-term ripple effect would be that tourism would decline and eventually the tax base. Pinellas County could lose as much as $1.6 billion in tax revenues over a 20-year period due to condominium conversion, the study said.

Essentially, said Schroder, CART would like to see a 3 percent cap on property taxes similar to the "Save Our Homes" legislation which limits homesteaded properties to a maximum 3 percent annual increase in taxes.

The rising tax rate has made many of the smaller businesses "economically unfeasible" to continue to operate, Schroder said.

The CART study cited one Island motel owner whose tax bill went from $20,000 to $42,000 in one year. The owner could not offset that increase by simply raising or doubling room rates.

"Rates are set well in advance, and you can't just double them to offset increased taxes. With that kind of tax increase, you get to a point where you can no longer continue in business," he said.

That's already happened with several of the smaller motels, and there are currently eight such properties for sale on the Island.

A central issue for CART is that property appraisers throughout Florida are allowed to assess property at "best possible use," rather than actual use. On Anna Maria Island, it's a "no-brainer" that condominiums will have a higher value than a motel.

The valuation method and tax problem has been recognized by State Sen. Mike Bennett and Rep. Bill Galvano, Schroder said, and they both agree that "something needs to be done and done quickly."

Schroder will present the CART study to Galvano and Bennett later this week and discuss future actions for tax relief.

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