Reform proposal not sitting well with taxpayers

Article Courtesy of The Daytona Beach News-Journal

Published June 16, 2007

TALLAHASSEE -- Reviews from Volusia and Flagler counties were mixed Friday on what state lawmakers have billed as the largest tax cut in Florida history.

Taxpayers should see roughly 7 percent cuts statewide this fall. Local governments will not take the big hit most had expected. And voters will decide Jan. 29 whether to change the system of benefits for primary homeowners.

But few seemed completely content Friday.

"The members are angry. They are. We're trying to calm them down," said Margie Patchett, executive director of Volusia Tax Reform, a group that has shepherded hundreds of tax-cut proponents rallies and meetings.

"They had high, high, high hopes, and they wanted more significant relief than they're going to get this year," Patchett said.

Adopted Thursday, the plan is expected to save property owners billions of dollars on future tax bills.

But, locally, many remained concerned it does too little for those who paid the most -- business owners, second-home owners, new buyers, renters and landlords and owners of vacant land. Those groups don't benefit from the state's assessment cap for primary homes.

And, while local governments will take less of a hit initially than most had prepared for, officials weren't necessarily breathing sighs of relief.

With the initial rollback, few local governments will experience tax revenue cuts of more than 7 percent compared to this year, according to an analysis by Volusia County Property Appraiser Morgan Gilreath.

While Volusia officials have prepared for a $25 million cut, Gilreath's analysis indicates it could be closer to $9 million.

County spokesman Dave Byron said administrators Friday were still analyzing the impact of the Legislature's decision. They still think the 10 percent cut they anticipated will be close to what they face.

Daytona Beach administrators have proposed a budget that expects to collect $3 million less in property taxes, though the Legislature's mandate would cost them about $2.2 million, according to Gilreath.

Administrators have proposed $18.7 million in budget cuts overall, Finance Director Rick Kisner said.

"A year ago, we heard the citizens loud and clear," he said. "This proposed budget is what we put together under that charge, even though we didn't have the knowledge of what the state was going to end up with."

For local governments, the second part of the Legislature's plan -- a Jan. 29 constitutional amendment where voters could make an unpredictable change to the state's tax base -- looms large.

"Because of what they've done, we've got to continue planning for the worst," DeLand City Manager Mike Abels said.

The constitutional amendment would let voters decide whether to phase out Save Our Homes, the 3 percent cap on assessment increases for primary homes.

The new system would have a percentage-based exemption. Save Our Homes recipients would have to opt for the exemption, while future homesteaders would get it automatically.

Local governments, particularly those with big residential tax bases, could see big hits.

People probably won't be "immediately dazzled" by the savings from the rollback, said Flagler County Realtor Matthew Wilson. It's estimated at about $174 each for homestead property owners statewide.

But the package does give immediate relief, and the amendment will let voters decide.

"I think what the Legislature has done is put it back in the taxpayers' laps with this referendum for January, which is exactly how you want to approach it," said Wilson.

Julius Bruggeman had a different take.

The tax bill for his homestead in New Smyrna Beach decreased during the recent real estate boom. But the bill for a non-homestead home he bought for relatives went from $6,000 to $22,000, he said.

Lawmakers failed to address the basic problem -- the fact that non-homestead properties have shouldered the vast majority of tax increases, Bruggeman said.

"The people that really are getting gouged are just remaining gouged," Bruggeman said.