TALLAHASSEE — Cities and counties with the highest property tax increases would be forced to make the deepest cuts under a new tax reform plan that Florida Senate President Ken Pruitt and House Speaker Marco Rubio announced Friday.
It is the first formal property tax agreement between the leaders since they announced they would need a special session in June to finish work on their top legislative issue of the year.
"We hope that you are as encouraged as we are with the excellent progress made," the two Republicans wrote to lawmakers Friday.
But the deal between the two chamber leaders does not reveal how much Floridians can expect to save on their tax bills. And property owners have been adamant about lowering taxes, while Gov. Charlie Crist has promised taxes will "drop like a rock."
Democrats acknowledged the agreement but said there is still a long way to go.
"The big thing we have been arguing over and that caused this debate to fall apart is how much to cut," said Senate Democratic Leader Steve Geller of Cooper City. "We still haven't agreed on that.
"This is an agreement in principle to come up with a process of reaching an agreement. It's not really an agreement on anything."
But Republican leaders said they needed to focus first on the best way to implement cuts.
"We are one significant step closer to our goal, and the progress is encouraging," Senate Republican Leader Dan Webster said in a statement.
"There are still questions to be answered because this is an extremely complex issue, but the good news is we are well on our way to providing immediate tax relief."
Under the agreement, all property owners would receive an immediate tax cut based on a formula that looks at how much cities and counties raised taxes during the past five years. Future property tax increases would be capped based on personal income growth.
Details of the formula were unavailable Friday, but the tax plan is expected to include four tiers of percentages for determining how much taxes would be cut. For example, if a county had increased taxes by a certain percentage, it would have to reduce bills by a specific percentage.
"We believe it is important to take into account local governments' past behavior regarding tax increases, and also to grant the greatest amount of relief to taxpayers who have experienced the greatest increases in their taxes," Pruitt and Rubio wrote in the letter.
Also included in the agreement is a plan to beef up the $25,000 homestead exemption and replace the Save Our Homes assessment cap. Those changes would need voter approval. The new exemptions would be based on a percentage of a homestead's value. Those percentages are not yet determined.
"This approach allows us to efficiently provide relief to the greatest number of Floridians, cure the inequities which are inherent in our current system and avoid creating new inequities," the letter said.
Cities and counties greeted the news with cautious optimism.
"We remain concerned that state officials are not allowing for the unique complexities of local decisions, such as hurricane recovery or community investment," Florida Association of Counties Chairwoman Susan Latvala said in a statement.
"In addition, other items such as a revenue cap and the tiered percentage approach do not account (for) the unique makeup and requirements placed on local government. These approaches would harm urban and rural counties in vastly different ways and could devastate some of our communities."
John W. Smith of the Florida League of Cities said the plan acknowledges differences among cities and praised an option that lets local governments opt out of the revenue cap with a supermajority vote.
"We're a little disappointed that in a lot of ways we're still talking in general terms," Smith said. "We'd be more excited if the details had been worked out so we could run the numbers and do some real analysis.
"But we're optimistic about a lot of the things they're talking about."
With the outline of a deal, Pruitt and Rubio said the next meeting of the joint property tax committee will focus on issues such as relief for low-income seniors, incentives for affordable housing, reducing tangible personal property taxes and reform for "working waterfront" assessments.
The committee meeting Monday is the last scheduled meeting before the special session, set for June 12-22.
"We need a tax cut and we need to have it in 2007," said Sen. Ted Deutsch, a Boca Raton Democrat on the joint property tax committee. "But I think there's also a realization that whatever that tax cut is, it needs to be one that won't devastate our local governments' ability to provide vital services."