Article Courtesy of The Orlando Sentinel

By Jason Garcia and John Kennedy
Published  April 26, 2007

TALLAHASSEE -- Gov. Charlie Crist sought to end an increasingly tense property-tax fight between the House and Senate by offering a new proposal Wednesday that would save taxpayers $33.5 billion over five years.

Under the plan, the average homeowner would save $340 the first year, growing to as much as $1,700 by the fifth year, Crist's staff said.

The proposal, which Crist said found the "sweet spot" between the competing House and Senate plans, is an attempt to settle a struggle among ruling Republicans that threatens to drag the Legislature past its scheduled May 4 finish.

"I think it's important for me to lead," Crist said Wednesday night before an Orlando town-hall meeting on property taxes. "The people didn't elect me to mark time. They elected me to make a difference."

The new Crist plan doesn't include swapping property taxes for a higher sales tax -- a key component of House Speaker Marco Rubio's proposal that the governor effectively declared dead.

"You know, there's an old song, 'You can't always get what you want,' " Crist said, quoting lyrics from the Rolling Stones. "But if you try sometimes, you might get what you need. And what we need is significant property-tax relief."

The House is seeking $40 billion to $50 billion in tax reductions during five years. The Senate plan would save $15 billion to $20 billion during the same period.

Crist's approach builds on a proposal he made in January, when he kicked off the property-tax-cutting push just weeks after taking office.

It would immediately roll back city and county tax collections to 2003-04 levels, while allowing some adjustment for growth and inflation. It also would restrict future increases in all city and county revenues -- including property taxes, impact fees and other levies.

The package calls for a special election in November to double the state's $25,000 homestead exemption. Each city and county then would have to get voter approval in a follow-up election. To avoid removing many homes completely from the tax rolls in poor and rural communities, the second exemption could apply after homeowners paid taxes on at least $25,000 of assessed value.

Save Our Homes portability?

Also on the ballot would be a measure allowing primary homeowners to carry with them when they move the savings they have accumulated under Florida's Save Our Homes tax cap.

Finally, first-time home buyers would gain an immediate 25 percent reduction on the taxable value of the house, under Crist's plan.

Senate Republicans said they were encouraged by the governor's proposal, particularly because it does not include the sales-tax hike that they adamantly oppose.

"The biggest thing here is no tax increase," said Senate Finance and Tax Chairman Mike Haridopolos, R-Melbourne. "I think the governor has weighed in because he, like we, [was] uncomfortable with the sales-tax increase."

The tax debate is now mostly a drama featuring Rubio, R-West Miami, and House Republicans against everyone else. But few predict that Rubio's surrender is imminent.

"I think the worst is yet to come," Sen. Jim King, R-Jacksonville, said. "There will be some gnashing of teeth before this gets done."

Rubio's chief property-tax negotiator, Republican Rep. Dean Cannon of Winter Park, said the House remains committed to the deep level of tax cuts it has already outlined -- which are more than the governor has proposed and also rely on the sales-tax hike.

'Drop like a rock'

"We've defined 'drop like a rock' our way," Cannon said, quoting Crist's well-used catchphrase. "We'd hope he would want to cut the people's taxes as much as we want to cut the people's taxes."
Crist's plan follows a week of increasingly harsh criticism of the House plan from senators in both political parties, which continued Wednesday when Senate President Ken Pruitt, R-Port St. Lucie, called it "a proven fact that the higher sales tax, the more regressive it is."

Still, Rubio and the House have shown no signs of budging off an approach they insist would both save money and restore fairness to the property-tax system, where many longtime homeowners pay far less in taxes than recent buyers because of the Save Our Homes tax cap.

The standoff extended into a third day of negotiations, which the House and Senate spent wrestling into the night over how far to force local governments to rollback their property-tax collections.

House-Senate talks break off

Talks abruptly ended about 8:30 p.m., with both sides accusing the other of doing little to resolve differences. Senators appeared ready to walk out when the meeting was gaveled to a close.

In Orlando, at the town-hall meeting at Valencia Community College's east campus, Crist heard from about 90 frustrated property owners demanding tax relief.

Residents, many of them rental-property owners, complained that soaring assessments had raised taxes so high they could barely afford to maintain their properties or turn even a small profit. They and others largely blamed local elected officials for failing to roll back tax rates as property values rose.

If the Legislature and Crist want to ensure tax relief, they said, they would have to find a way to curb spending at the local level.

"We are in trouble," Orlando resident Elese Sanford said. "We have to have help." But, she said, "I beg you" not to pass tax reform without caps on local government. "They could do a lot of cutting."

When another resident pointed out that local officials contend they would have to cut essential services such as fire and police protection, Crist jumped in.

"That's pathetic," he said. "Nobody believes that. Nobody's that stupid."

And if local governments make that argument, Crist said, then "shame on them."

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