Lawmakers
approve property tax plan
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Article Courtesy of The Sun Sentinel
By Linda
Kleindienst and Mark Hollis
Published June 15, 2007
TALLAHASSEE
-- Florida legislators Thursday night gave the final nod to a
multi-billion-dollar property tax-cut package they hope will kick-start
Florida's sluggish real estate market and boost the state's faltering
economy.
The two-pronged plan first offers immediate relief by forcing cities and
counties to roll their taxes back to the 2006 level and then cut up to an
additional 9 percent, depending on how much they've raised taxes over the
past five years.
Tax bills this November should reflect a savings of $15.6 billion to
owners of all properties – homesteaders, snowbirds, landlords and
business owners alike. The average homeowner is expected to save $174 this
year.
The House approved the rollback measure by 117-1, with the lone
"no" vote cast by Rep. Jim Waldman, D-Coconut Creek. The Senate
passed it 37-0.
In January, voters will be asked to approve the second element of the
plan, an amendment to the state constitution that establishes a
"super size" homestead exemption for permanent state residents.
Lawmakers hope the new exemption will reduce the tax burden enough to make
homes more affordable, especially for first-time buyers who have had
trouble getting into the state's high-priced housing market.
The amendment, which passed the Senate on a 25-12 vote and the House, on a
74-43 vote, will be decided on Jan. 29, coinciding with Florida's
presidential preference primary.
If the amendment passes muster with voters, the average homeowner is
expected to see a $1,306 tax break by fall of 2008.
"What does it mean? When you talk about $1,200 to $1,300 in
savings…it means that if you have a child in first grade and you want to
buy a pre-paid scholarship so he can go off to college, you can now pay
for it with this tax relief," said Senate Finance and Tax Chairman
Mike Haridopolos, R-Melbourne. "This is real. That's what $100 a
month means to a family."
The price tag of the tax-cut package was initially estimated to exceed
$31-billion over the next five years. But a late change to the tax
package, crafted by Senate Republican leaders, blunts the overall
financial impact, reducing it to about $24 billion.
Democrats opposed the change in the homestead exemption, arguing that it
will lead to budget cuts at the city and county level that could decimate
needed services like fire rescue and law enforcement.
"I don't want the people in Century Village who get sick to have to
wait for an ambulance to get there because there are fewer
firefighters," said Senate Democratic Leader Steve Geller of Cooper
City.
It's also estimated that public schools could lose more than $7 billion
over five years if the amendment passes.
"The real tragedy of this proposal is that it's the single largest
cut to education spending ever in the United States, and the people who
will pay the price for this fix are the kids in school," said Rep.
Shelley Vana, D-Lantana, a former president of the Palm Beach County
Classroom Teachers Association.
Hoping to allay fears of longtime homeowners worried over how a new
super-sized homestead exemption could affect their tax bills, lawmakers
decided to give taxpayers a choice.
Originally, homeowners would have been forced to drop their Save Our Homes
protection – which limits increases in their home assessment for tax
purposes to 3 percent a year - and switch to the new homestead exemption
plan if they saved even $1 a year under the new plan.
But no one could tell homeowners whether they'd still be better off under
the new system just a few years down the road.
"The people at home who have Save Our Homes say they like what
they've got and they don't know what will happen to them," said Sen.
Jim King, R-Jacksonville. "Give us a chance to make our constituents
a little more comfortable.
The amendment would allow homeowners to keep Save Our Homes. They will
have the option of switching to the new homestead exemption system at any
time – but once they switch, they wouldn't be able to go back to Save
Our Homes protection again.
Early Thursday, Gov. Charlie Crist signaled that he was happy with
legislator's progress.
"I'm not saying that it's perfect, but I think that it's important to
cut taxes, and the consequences of not doing something are significant,''
Crist told reporters.
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