Senate property tax bill has less savings

The state Senate will unveil its own plan today to cut property taxes.

It would give homeowners a smaller tax break.

Article Courtesy of The Miami Herald

Published  April 12, 2007

TALLAHASSEE -- After six weeks of public hearings and secret meetings to crunch numbers, the state Senate today will release a tax-cutting plan that seeks to lower Floridians' tax bills -- but also lower expectations over how much they will save.

In contrast with a radical and headline-grabbing plan pushed for weeks by House Speaker Marco Rubio of West Miami, the Senate's plan is bipartisan, far less threatening to local governments and won't raise the state sales tax.

It also will give homeowners a smaller tax break.

The Senate's plan is so murky right now that one of its architects acknowledged he has been ''talking in circles'' for weeks, and another said he didn't yet know what the bottom-line savings would be.

But this much appears likely about the plan, which will be discussed by the Senate on Friday and possibly voted out of the chamber next week:

 Local government property taxes will be rolled back using the 2004-05 fiscal year as a base, and future increases in tax revenue will be capped by a certain percentage yearly.

 Businesses will get a $25,000 exemption for the so-called tangible-personal property taxes paid on equipment such as desks, shelves and computers.

 Property appraisers will have to change the way they assess some properties, such as working marinas that are now taxed as if they're high-priced waterfront condominium developments. Developers of affordable-housing properties also will get a special tax break, an idea first proposed by Senate Democrats.

 Homeowners could transfer some of their existing tax-assessment savings to another home they buy, avoiding the high taxes that new buyers must currently pay. Senators were still deciding late Wednesday how much of this ''portability'' proposal, also sought by Democrats, will make it into the plan.

Along with a discussion about whether to increase the $25,000 homestead exemption for homeowners, the portability issue was being hammered out by Senate Minority Leader Steve Geller of Cooper City and Senate Majority Leader Dan Webster of Winter Garden. The two worked closely together earlier this year to swiftly hammer out solutions to Florida's property-insurance crisis.

''It's way more complicated. Way, way more,'' said Webster, a former House speaker. 'I was thinking, `Hey, let's come up, do across-the-board something or rollback or whatever and that'd be it.' ''


Troubling the Senate at every turn are these questions: Is the fix fair, comprehensive and constitutional?

The big hang-ups that have dogged senators working on a plan:

 Save Our Homes: The inequities in Florida's tax system have been driven not just by local government spending, but by the 1992 voter-approved Save Our Homes constitutional amendment, which caps property assessments on primary homes to keep people from being taxed out of their homes as they appreciate in value. As government grew, the tax burden disproportionately fell on businesses and owners of second and new homes, which are not protected by the cap. The chances of changing the cap are so slim that lawmakers say they won't bother with proposals to change it unless they can also increase the $25,000 tax-exemption on homes.


 Portability: Because new homeowners have to pay the full tax amount on a new home, some longtime homeowners say they're ''trapped'' and can't move to smaller houses. Allowing people to carry some or all of their tax savings to a new home, though, could be unconstitutional.

 Property assessments: Property appraisers across the state usually value property based on its highest potential use, but that has led to top-dollar assessments on hundreds of mom-and-pop businesses. But what should the standard for assessments be? No one's sure.


House Speaker Rubio thought the best way out of the trouble was to eliminate homeowners' taxes and make up the money with a sales-tax increase, while drastically cutting local government spending. Rubio said he was in the dark about the Senate plan Wednesday but said he would ''embrace it'' if it cut taxes more than his plan. ''Our new motto is: How low can you go?'' he said.

Rubio conceded Wednesday that he might be forced by political necessity to find a middle ground between the two plans. He won't say whether he has the votes to get his proposal through his own chamber right now but said he and Senate leaders will appoint a conference committee to start working on a compromise next week.

''We're also open-minded about what can get done,'' he said.

Senators, who had expected Rubio to have the votes for his plan early on, rejected his approach.

''We're just talking about ideas. I couldn't tell you how much our plan costs right now,'' Webster said. ``And until you sell the ideas, it seems a little wasteful to go out and spend a whole lot of effort putting the whole thing together when we haven't accommodated everybody.''