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Saving the Mom and Pops

By Hannah Wallace June 30, 2005

Don Schroder left his Manhattan advertising and marketing company in 1986 for Holmes Beach, but not for retirement. Schroder went into real estate and became a self-proclaimed activist when he joined the Anna Maria Island Chamber of Commerce. Schroder was president of the Manatee Association of Realtors in 2000 and president of the Anna Maria Island chamber in 2003. What chamber members told him about rising taxation was startling, so in October 2004 he and motel owner Nigel Brown formed Citizens Against Runaway Taxation. CART now boasts more than 100 members, including Ed Chiles, son of the late Florida Gov. Lawton Chiles.

What got you interested in tax reform?

As chamber president, I heard numerous complaints from members, particularly small motel and business owners, that increasing property values and accompanying taxes were forcing them to consider selling out or closing. I researched property tax increases and found that from 2001 to 2004, the average island business property tax increased almost 70 percent. Many mom-and-pop motel owners were hit even harder with gulf-front locations taxed an average increase of 122 percent that same three-year period. The owners were telling me they were being forced out of business because they couldn't raise their rates sufficiently to cover the increased taxes. These were my friends, my associates, my neighbors, and I just felt we as a community had to do something.

The [Manatee County] property appraiser's office was appraising their businesses at the 'highest possible use,' which it is empowered to do, and in the property appraiser's mind, the highest possible use of the property is condominiums. It became apparent that changes to the appraisal method and tax rates were needed or we would lose the character of the island.

We formed CART because we knew we needed a lot of volunteer help and funding to effect change. More than 100 people showed up at the first meeting.

Is appraising island property at "highest possible use" fair?

No, because if you own a small motel and your taxes jump 50 or 100 percent in one year, can you raise your room rates 50 or 100 percent to offset that increase and still keep your same occupancy level? Business owners can't prepare a suitable business plan because they can't even come close to estimating next year's taxes. We have many cases of property taxes more than doubling in just one year.

On Anna Maria Island, property taxes have gone up an average of 121 percent in four years, but the average room rate has only increased about 22 percent the past four years.

It's simple economics. Eventually you'll reach the point where you can't continue in business. And because of island density laws, you can't expand your motel to add rooms to increase revenue.

We want the property appraiser to use the gross revenue method of determining value, but they don't because it means less tax revenues. We've talked to the property appraiser, but without success. To effect any change, we knew we'd have to either get the county commission to change the appraisal method or get the state legislature involved with a statute. The entire Florida tax code is up for review in 2007, and we're meeting with the Sarasota-Manatee legislative delegation this summer to air our concerns.

Have other Florida beach communities been supportive?

A number of other Florida beach communities have similar problems. Representatives from the chambers of commerce of Sarasota, Charlotte County, Siesta Key, Venice and North Port will be going with us to Tallahassee.

Where does CART go from here?

We're looking at the long haul. If we keep doing our homework, talking to lawmakers and keep the issue in front of the people, we'll eventually get somewhere. Change must happen, hopefully soon, or we're going to lose the beauty of this island.

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