Property tax cut is down to the details

With the state Senate passing a property tax rollback a day after the House OK'd its proposals, members of both chambers need only to work out differences.


Article Courtesy of The Miami Herald

By MARC CAPUTO AND MARY ELLEN KLAS
Published  April 20, 2007

 

It's all but guaranteed: Property tax rates will be rolled back for everyone, and tax rates may never skyrocket again.

So what are the savings? There are no guarantees and no firm numbers yet. Details will emerge in the next 15 days, as a select group of lawmakers from the state House and Senate hash out competing bills that seek to manage Florida's property tax system in different ways.

The House wants a radical restructuring of taxes and deep cuts to local governments, which have fattened off years of the real estate boom. The Senate wants to cause less pain for local government, let homeowners take their tax savings to a new home, and prevent future spikes in tax collections that have occurred since 2003.

As a result, the House plan, subdivided into four bills, saves taxpayers more but is more controversial. The Senate plan, which includes four bills, saves less and has bipartisan -- and unanimous -- support. The Senate took less than 20 minutes Thursday morning to unanimously amend and pass its property tax plan. Contrast that with the House, which took more than 10 hours Tuesday and Wednesday amending and debating its bills amid partisan hand-wringing.

''We could have made it more entertaining if you would have liked,'' said Senate Minority Leader Steve Geller of Cooper City. ``What was there to argue about when we had worked closely together to come up with a comprehensive package?''

TRUST IN LEADERS

Senate Majority Leader Dan Webster said the Senate vote was ''anticlimactic'' because the members ''trust'' the leadership -- a sentiment that strengthens the Senate's negotiating hand.

The Senate plan caps tax rates after rolling them back to the 2005-06 tax year for an average 7.6 percent savings statewide. The House's two plans seek to cap tax rates after rolling them back to 2000-01 or 2003-04 levels. The 2000-01 level plan would slash homeowners' tax rates by an average of 19 percent statewide. The other plan would eliminate homeowner property taxes in favor of raising the state sales tax by 2.5 cents.

The House's proposed sales tax increase is all but dead with senators. And the Senate's one-year-only rollback is all but dead with House leaders and, perhaps, Gov. Charlie Crist, who has stayed out of the fray except to repeat his demand that property taxes should ``drop like a rock.''

''I'm for lowering taxes as much as we possibly can without sacrificing important services, like law enforcement,'' Crist said Thursday, after addressing the Florida Sheriffs Association.

Another point of contention between the chambers: the measure known as ''portability,'' which would allow homeowners who switch homes to transfer some of their tax savings from the Save Our Homes act that caps homesteaded property assessments. Many homeowners who now want to move say they're ''trapped'' in their homes because they can't afford the tax spike if they move to another home and lose the Save Our Homes cap, which limits the yearly increase of home assessments to a maximum of 3 percent.

The Senate plan -- which would need voter approval -- allows homeowners to transfer their Save Our Homes savings to another home, but limits the savings to $500,000. For those who benefit, annual property tax assessments would rise by 10 percent a year until the home reaches the taxing level it would have eventually hit without the savings.

A BACKUP PLAN

The House package, by contrast, includes no portability provisions -- yet. Why? House leaders had hoped to eliminate the problem entirely by asking voters to repeal all taxes on homesteaded property.

But with the Senate rejecting any sales tax increase, House leaders acknowledged they need a backup portability plan, so they have resurrected a portability bill that until now had not received a hearing.

The bill, sponsored by Rep. Carl Domino, a Jupiter Republican, asks voters to approve a constitutional amendment to allow homeowners to take 100 percent of their Save Our Homes savings with them to a new home anywhere in Florida and continue to receive the 3 percent cap in annual assessments.

Domino, who has proposed the bill for the past four years, said he thinks it has ''the best chance ever'' because House leadership is behind it.

The House Policy and Budget Council is expected to pass the portability bill today and set a special election for this fall to take up the portability plan, he said.

Rep. Ray Sansom, who chairs the council, agreed that portability must be part of the House package ''to negotiate in good faith'' with the Senate.


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