Florida Voted and approved Property Tax Cuts
Jan 31, 2008
The answer to both questions is simple: It depends.

The immediate winners of Amendment 1, approved by voters by a 2-1 ratio, will be longtime homeowners who moved last year or plan to move now, existing homeowners, businesses that pay taxes on tangible personal property, and owners of commercial property, rental units or second homes whose values have gone up more than 10 percent in the past year.

For the first time since voters approved the Save Our Homes tax limitations in 1992, homeowners can transfer the tax savings they have accrued when they move.

March deadline

To get the added tax break, those who move must fill out a simple form from their county property appraiser by March of each year. The appraiser will then calculate the savings based on the market value of the new home and the assessed value of the old home and apply it to the next tax bill.

Anyone who receives a homestead exemption is eligible to get an increased exemption on this fall’s tax bill. That equates to about $15,750 in Miami-Dade and $16,000 in Broward and amounts to an average savings of about $240 per home statewide.

Not everyone in the state will get the added exemption. It doesn’t apply to homeowners in mostly rural areas whose property is assessed at between $50,000 and $75,000.

And there’s nothing to stop cities and counties from adjusting their tax rates to recover some of the lost revenue.

“We’re certainly going to see some [rate] increases,” predicted Kurt Wenner, director of tax research for Florida TaxWatch. And because the assessment increase on homeowners is limited to 3 percent a year, the burden will be increased on nonhomestead property if rates rise, he said.

Nonhomestead

Owners of nonhomestead property, such as second homes, rental property or commercial buildings, will get a tax break too – but only if their assessment would have climbed more than 10 percent this year. The new amendment limits the increase on their tax assessment to 10 percent.

Crist’s response

Gov. Charlie Crist campaigned on the promise that this is the first step in a prolonged push for additional tax cuts, but the prospect of additional tax breaks appears less certain.

“I know that there is a thirst and hunger to cut property taxes additionally, particularly as it relates to business,” Crist said Wednesday. “I share that interest.”

But before he pursues more tax cuts, he said he wants to consult with business leaders to find the smartest approach.

Legislative leaders said this week they are reluctant to take up the issue in the upcoming session as they struggle with finding $2 billion to cut from the state budget. And the chairman of the constitutional tax commission, which meets every 20 years and is meeting this year, said on Wednesday that the panel won’t fiddle with the Save Our Homes exemption now that voters have spoken.

“I’m not implying we’re done with property-tax reform by any means,” Allan Bense, chairman of the Taxation and Budget Reform Commission, said at its meeting on Wednesday. But he said the amendment “helped clear the deck” and took portability and doubling the homestead exemption “off our plate.”

The commission has the power to put any tax-reform amendments directly on the November ballot.

Bense said the commission would not propose any changes to Save Our Homes because despite concerns from newcomers to Florida and first-time home buyers about the “unfairness” of the system, voters would never approve getting rid of it.

Fairness issue

Other members of the panel, however, said they want to work on making the system fairer. By giving longtime homeowners the lion’s share of the benefits of portability, several argued, the amendment makes an already inequitable system more unfair and vulnerable to a constitutional challenge.

“I’m very much worried,” said Commissioner Talbot “Sandy” D’Alemberte, president emeritus of Florida State University and former American Bar Association president. “We don’t have tax reform with” Amendment 1, he added.

The panel is already considering a property-tax reform plan proposed by Commissioner John McKay, a former Florida Senate president from Bradenton. McKay’s plan would repeal the property taxes that now pay for schools, reducing the tax bill for all taxpayers by about 40 percent, and replace that money by expanding the state’s sales tax to include many services that are now exempt from taxes.

Copyright © 2008 The Miami Herald, Mary Ellen Klas and Gary Fineout. Distributed by McClatchy-Tribune Information Services.
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