Gov. Crist signs historic bill calling for

$15.6 billion in tax cuts


Article Courtesy of The Sun Sentinel

By Linda Kleindienst and Josh Hafenbrack
Published June 22, 2007

 

TALLAHASSEE -- Gov. Charlie Crist barnstormed the state Thursday to trumpet his signing of a historic $15.6 billion property tax cut, but many Floridians expecting major savings may be disappointed.

While Crist promised the new law "will make property taxes drop like a rock," legislative analysts said the measure passed by state lawmakers last week will save the average taxpayer just $174 on this fall's tax bill. And that sum could vary greatly depending on where people live and what their home is worth.

Crist officially signed the tax-cut bill in Tallahassee and another that schedules a Jan. 29 special election for voters to decide if they want even deeper cuts through an expanded homestead exemption.

"This is the people's tax cut. The people have the power to further drop their property taxes like a boulder come Jan. 29," said Crist, who then flew to attend ceremonial signings in South Florida and Tampa.

In Palm Beach County, Crist visited the home of Michael and Jeanette Waddle west of West Palm Beach to tout the tax cut and court voter support for super-sizing the homestead exemption.

The Waddles paid $250,000 for their single-story house on a quiet suburban street in 2005. The first year they had a $2,062 tax bill based on the previous owner's homestead exemption. A year later, the home was reassessed and the tax bill soared to $4,650.

"It strained the family budget, taking money away from their children," Crist said. "That's not something government should do."

Crist estimated the tax rollback would save the Waddles $350 this year. If the constitutional amendment passes, he said their tax bill would plummet to $1,600 a 66 percent reduction.

Many homeowners would not see nearly that big a break. The Waddles are a poster family for an expanded homestead exemption for two reasons. They recently bought, so they haven't accrued Save Our Homes savings. Their home price is also modest by South Florida standards, and most of its value would be shielded from taxation until their assessment starts to rise.

"This is going to make a big difference in our family," Jeanette Waddle, 28, told a swarm of TV cameras set up in her palm-lined driveway. She said she'd put the extra money back into her house and toward the education of her three children, 2, 6 and 9.

The Waddles were symbolic for another reason. Mike is a firefighter with the city of Greenacres, and Crist used his visit to dismiss concerns that cities and counties, suddenly deprived of a chunk of tax revenue, would cut back on police officers and firefighters.

"They have nothing to fear," the governor said of public safety workers. But, after Crist left, Mike Waddle acknowledged there is angst at the firehouse these days.

"People can't afford their taxes, but [layoffs] are a concern," he said. "I don't want to see any of my brothers [in the fire department] lose their jobs."

The new tax-cut law requires cities and counties to hold tax rates at 2006 levels and then cut up to another 9 percent, depending on how much they raised taxes over the past five years. Those that raised the most will have to cut the most. Broward County government is expected to face a 5 percent cut, while Palm Beach County will undergo a 9 percent reduction.

It is estimated that Florida taxpayers, including permanent residents, snowbirds, owners of second homes and business owners, will save $15.6 billion over five years.

In a vain last-ditch effort to get Crist to veto the bill, officials from the Florida Association of Counties warned Wednesday that state has taken control of what should be a local government function to decide what each community needs and then raise the revenue to provide it.

But state leaders say they hope to ignite the state's sluggish real estate market and economy by making it more affordable for Floridians to stay in their homes and encouraging new homebuyers.

Some cities that are in financial distress or have kept their taxing rate below the state average will face no extra cuts. But special taxing districts, like the North Broward Hospital District and the South Florida Water Management District, will have to cut by 3 percent.

The tax cut bill was only one part of the Legislature's two-pronged attack on rising property taxes, with the second coming in January. If voters approve a change in the state's constitution to increase the homestead exemption for permanent residents only, legislative analysts estimate the average Florida homeowner could see a $1,300 drop in annual property taxes by the fall of 2008.

It will take 60 percent of the voters to approve the measure, which would exempt 75 percent of the first $200,000 of a home's value from property taxes. Homes valued between $200,000 and $500,000 would get an additional 15 percent exemption. The $500,000 limit would grow at the same rate as personal income and could be changed by a two-thirds vote of the Legislature.


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