Property tax solutions explored

Gov. Crist backs portability option

Article Courtesy of The Sun Sentinel

By Linda Kleindienst

Published October 7, 2007


TALLAHASSEE - Carolyn Gray has been trapped for two years in her home because she can't sell it.

"I'm not complaining about my taxes. But no one can buy," said Gray, 51, who has lived in her Jupiter home since 1996. "I'm furious."

To bring relief to Gray and countless other Floridians and hopefully revive the state's dead-in-the-water real estate market, Florida's legislators are considering a smorgasbord of possibilities. Call the process "Property Tax Reform: The Sequel," after lawmakers saw a major component of the first solution they had devised get tossed out by a state judge.

"We're essentially starting with a clean blackboard on which to write whatever we're going to write," said Rep. Dean Cannon, R-Winter Park, the House's chief negotiator on the issue

Now, near the top of the menu of options, and a favorite of South Florida lawmakers from both parties, is "portability" granting Florida homesteaders the right to transfer the important tax protections of the Save Our Homes clause of Florida's constitution from one home to another.

"[Portability] is the biggest thing we can do to restart the market along with finding a way to help first-time home buyers," said Senate Democratic Leader Steve Geller, of Cooper City. Since the debate began on how to rewrite the rules for taxing Florida real estate, Geller said he has received "thousands" of letters, many complaining that the existing system bars them from moving or others from buying their home.

Geller has been working with Republican Gov. Charlie Crist, a former classmate at Florida State University, to make portability an ingredient in whatever alterations to the property tax laws the politicians in Tallahassee agree to. And it may work though in the past, top Republican lawmakers have questioned whether portability would violate the U.S. Constitution's guarantees of equal protection. Crist, who has promised Floridians to make their property tax bills drop "like a rock," wants state legislators to meet again in special session before the end of October to come up with another approach on property taxes that could be put to voters in January.

The governor is pushing for portability, along with doubling the current homestead exemption to $50,000.

"We've got a lot of arrows in our arsenal, a lot of ways to skin this cat," Crist said last week.

Republican leaders in the House and Senate aren't yet sure what cocktail of tax changes they'll concoct, but they're already working on the problem even as they are in the midst of a 10-day special legislative session to cut the budget.

Sen. Jeff Atwater, R-North Palm Beach, on track to become Senate president next year, said he and his colleagues need to craft solutions that have broad voter appeal.

"The question is, how do you balance it for the newcomer to the housing market and the present Florida homeowner who feels trapped," Atwater said. "For the sake of our economy, people need to be able to find a home and move."

Added to the state constitution by voters in 1992, Save Our Homes limits the increase in the assessed value of a Florida resident's legal homestead to no more than 3 percent a year. For Floridians who have lived in their houses or apartments for many years, that fiscal safeguard has helped keep down property taxes.

But those who want to buy a new home can't take that 3 percent protection with them. And for many Floridians, that is a problem. A buyer of Carolyn Gray's Jupiter home, for instance, would face at least a 400 percent increase in the $1,100 in property taxes she now pays because the property would be reassessed to reflect its current market value. And if Gray purchased another Florida home, she'd have to pay the same taxes as a newcomer to the state.

The Legislature tried to tackle the problem of soaring property taxes back in the spring, but the House and Senate couldn't agree. During a rancorous three-day special session in June, lawmakers ordered cities and counties to roll back their tax rates, then drafted a proposed amendment to the state constitution that would create a "super size" homestead exemption.

That new plan would have exempted from taxes the first $150,000 of a $200,000 home and up to $195,000 of a $500,000 home. Ultimately, it would also have doomed Save Our Homes.

But a Tallahassee-based judge, hearing a lawsuit brought by Weston Mayor Eric Hersh, scratched the proposal from the Jan. 29 ballot three weeks ago. And the hunt at the Capitol for another key to the state's property tax troubles was on.

Senate Majority Leader Dan Webster, R-Winter Garden, his chamber's lead negotiator on property taxes, said he's hearing from members of the House, Senate and Governor's Office that the Legislature needs to "do something different than what we've got."

Cannon, the House point man on the issue, agreed it's premature to say what new plan the Legislature will come up with.

Although the judge's ruling to strike the "super size" homestead exemption amendment from the ballot is being appealed, Cannon said the Legislature should act to insure voters are certain of having something to approve or reject on the January ballot.

"Homestead exemption will be addressed. How we do it, I don't know," Cannon said.

It is still an open question whether the lawmakers can reach agreement before the end of this month, the deadline to place another proposed amendment on the Jan. 29 ballot.

"If both sides of the Capitol are serious about providing tax relief in a way that won't devastate the education system and provides portability, I think it'll get done," said Sen. Ted Deutch, D-Boca Raton, vice chairman of the Senate Finance and Tax Committee.

Gray said she wants action, sooner rather than later.