Tax cut deal starts to jell

Legislative leaders back a plan that keeps Save Our Homes.

Article Courtesy of The St. Petersburg Times

By Alex Leary

Published October 11, 2007

TALLAHASSEE - It seems like a done deal.

Lawmakers meeting in special session will not take up property taxes until Friday, but leaders already have agreed to the ingredients of an $11-billion tax cut package.

New to the equation Wednesday were nearly $3-billion in additions that would eliminate property taxes for low-income seniors and provide breaks for owners of low-income housing and waterfront commercial property.

The main provisions of the deal still stand, which include doubling the $25,000 homestead exemption, allowing people to carry Save Our Homes benefits to new homes and a tax discount for first-time home buyers.

The deal will be formally outlined on Friday, as lawmakers return to Tallahassee to finish a special session on budget cuts. The session was extended through next week, with a final vote on property taxes coming as early as Wednesday.

Democrats, whose votes are needed to put the proposal on the Jan. 29 ballot, greeted the deal cautiously.

"Until we see the details and hear from the public and other stakeholders, we make absolutely no commitment," said House Democratic leader Dan Gelber of Miami Beach.

But Democrats have voiced support for most of the package because it preserves Save Our Homes and largely spares school budgets from cuts.

Gov. Charlie Crist and legislative leaders put the new proposal together after a circuit judge ruled that the language of the original plan, featuring a "super homestead exemption" was misleading because it did not plainly state that the popular Save Our Homes assessment cap would be phased out.

The governor worked aggressively on the plan in recent days, even as he acknowledged it fell short of savings under the prior proposal, which has been abandoned.

House Speaker Marco Rubio, R-Miami, applauded Crist's "extraordinary leadership" but alluded repeatedly to those lower expectations while detailing $3-billion in additions to the governor's five-year outline.

Doubling the homestead exemption, for example, would result in just over $200 a year in savings for the average homeowner. And the plan does little for businesses and second-home owners - groups that have absorbed the brunt of the tax burden in recent years.

"This is a time for candor," Rubio told reporters. "It would serve no one too stand up here and say this is the best plan ever."

There is an Oct. 30 deadline for putting a proposed constitutional amendment on the Jan. 29 ballot.

As it stands now, the plan includes these provisions:

1. The homestead exemption, now $25,000, would go to a maximum of $50,000. But it's not that simple. Most homeowners would get the full $50,000 exemption. But to help poorer counties with lots of inexpensive homes, the extra $25,000 exemption would apply only to assessment amounts from $50,000 to $75,000. So, for instance, the owner of a house worth $35,000 would pay taxes on $10,000.

2. Save Our Homes would be made portable. All of the accrued benefit (up to $1-million) could be transferred to a more expensive home. Homeowners who downsize would pay taxes on the same percentage of market value as they did on their old home. This increased exemption would not apply to school millages.

3. First-time homesteaders would get an exemption equal to 25 percent of the market value of the property, within certain limits. The exemption would be phased out over time, as the homeowner increasingly benefitted from Save Our Homes.

None of these exemptions affect property taxes for schools.

4. Property taxes would be eliminated for low-income seniors. The exemption would apply to seniors who qualify for the existing $50,000 additional local option homestead exemption. To qualify now, the individual must be 65 or older and have a household income of less than $24,214.

5. The amendment would eliminate the presumption of correctness given to property appraisers for challenges to assessments involving properties whose just value increases more than the average for their class.

6. Several provisions of the Legislature's original tax cut plan are retained, including:

-An exemption for the first $25,000 of tangible personal property. Many small businesses and mobile home owners would no longer have to pay tangible taxes.

-A provision allowing property used for affordable housing to be assessed at less than just value. To qualify, the property would have to be subject to rent restrictions imposed by a government authority.

-The working waterfronts provision, which would allow property located on the water and used for commercial activities to be assessed according to its actual use, rather than the now legally required "highest and best" use.


Main provisions

1. Save Our Homes benefit is retained -you could take it with you if you move.

2. Maximum homestead exemption would go from $25,000 to $50,000.

3. First-time buyers get an exemption of up to 25% of a home's market value.

4. Property taxes eliminated for low-income seniors (household income under $24,214).

5. Property appraisers lose "presumption of correctness" when their assessments are appealed.