Senate proposes targeted property tax cuts

The state Senate announced a comprehensive -- and very complicated -- property-tax

proposal that would lead to smaller tax cuts than the House's more radical plan.

Article Courtesy of The Miami Herald

Published  April 13, 2007


TALLAHASSEE -- It's complicated. It's comprehensive. And it would cut property taxes for every Florida home and business owner -- but not by much.

The latest property-tax plan was unveiled Thursday by a unified state Senate, which wants to use a sharpshooter approach to take precise aim at controlling Florida's burgeoning property taxes, in contrast to the method proposed by House leaders, who would eliminate homeowner property taxes entirely in favor of raising sales taxes.

The Senate plan offers something for nearly everyone: providers of affordable housing; business owners nagged by taxes on their computers; citizens who want to better understand government spending, and people who want to transfer their existing homeowner tax cap to another home.

The bipartisan proposal would likely lower the average tax bill 6.5 percent next year and 3.5 percent the year after, according to Senate estimates. It would force cities and counties to cut about $3 billion over the next two years, and $8 billion more through 2012. Unlike the plan espoused by House Speaker Marco Rubio, it would not touch school taxes -- which make up about half a home's tax bill.

The differences between the House and Senate versions are so vast that legislators ''need to meet from sunup to sundown'' for the remaining three weeks of the session to agree on a workable plan, said House Democratic Leader Dan Gelber.

Senate President Ken Pruitt said he's confident the Senate and House can find accord. He added that the Senate took six weeks to come up with a plan because it wanted to have consensus among its members and propose something ''meaningful'' that helps people but doesn't cripple local governments.


''When you're putting pencil to paper, when you're crossing T's and dotting I's, you gotta get it right the first time,'' Pruitt said. He said the Senate plan provides ''certainty'' for taxpayers that ``we're going to protect their future.''

But some supporters of Rubio's more-radical plan found the Senate one lacking.

''It's horrible. What's it going to save me? $200. I'm paying about $7,400 in taxes now,'' said Sergio Martinez, 40, a Realtor and courier-service owner from West Miami-Dade who drove to the Capitol at the invitation of an election group backing Rubio's plan.

Martinez and his wife have adopted six children and said the tax code makes it difficult for people to raise large families. Another taxpayer, Nancy Hamlin of Sarasota, called the Senate plan ``crap.''

Rubio declined comment on the Senate plan, saying he hasn't seen it. He said he will accept any plan that lowers taxes ''meaningfully'' but also scoffed at the prospect of too much compromise.

''This is not a place that likes to do dramatic things,'' he said. ``It's not. This is a place that specializes in packaging something as reform . . . and then we go home and it really didn't do what it was supposed to do.''

By contrast, Pruitt extended an olive branch to Rubio, saying the House speaker deserves the credit for setting the tone of the debate. Some senators, though, grumbled that Rubio has unrealistically raised Floridians' expectations of the size of tax cuts.


The Senate plan is divided into six major parts. Its key provisions would:

 Roll back local-governments' property tax base to the 2005-06 tax year, then allow governments to increase and adjust rates based on population and average wages. The cost statewide to local governments: $1.3 billion in 2007-08, and as much as $2.5 billion in 2010-11.

 Cap property-tax revenues for cities and counties going forward, using a formula that assumes population growth and a rise in average wages starting in 2009.

 Give taxpayers a ''bill of rights'' that allows them to more easily see how government money is raised and spent.

 Exempt $25,000 of businesses' tangible personal property taxes -- paid on items such as computers and shelves. The total tax savings: $54 million in 2008-09.

 Double the homestead exemption to $50,000 for first-time home buyers. The extra $25,000 of the exemption would decrease over the next few years back to the traditional $25,000.

 Tax affordable-housing owners based on collected rent, rather than on a property's market value.

 Allow ''portability.'' Homeowners could transfer savings in taxable value from to a new home. However, the taxable value of the new home could grow by as much as 10 percent yearly, in contrast to the current 3 percent increase allowed by the Save Our Homes cap. Over time, the cap on the new home's taxable value would return to 3 percent.

Some details of the plan are still not clear, as the Senate released its proposal but no actual legislation. Starting today, lawmakers will begin reviewing legislation and debating it. The proposal is scheduled for a vote by the full Senate next week.

Changing the Save Our Homes cap would require a constitutional amendment, subject to a two-thirds vote of the Legislature to put it on the ballot. Sixty percent of voters would have to approve it.

The Florida Association of Counties, which has vigorously opposed the deep cutbacks in the House plan, believes the cuts in the Senate proposal are milder but ''may still cause significant cuts to local governments and impact services to our citizens,'' said Susan Latvala, president of the organization.

Gov. Charlie Crist said he was ''encouraged'' by the Senate plan but refused to say which approach he preferred.

''I look forward to forming a consensus on what we will present to the people of Florida to drop their property taxes like a rock,'' he said.