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Crist calls for sweeping property tax changes

Among other changes, Gov. Charlie Crist wants to double the homestead exemption to $50,000 and extend the 3-percent Save Our Homes tax cap to businesses and rental properties.

By STEVE BOUSQUET
Published January 30, 2007

TALLAHASSEE -- Gov. Charlie Crist called for sweeping changes to Florida’s property tax system Tuesday, including allowing homeowners to shift the Save Our Homes tax cap to a new home and doubling the homestead exemption to $50,000.

Crist also wants to extend the 3-percent Save Our Homes tax cap to businesses and rental properties, and would exempt business-owned property worth less than $25,000 from Florida’s tangible personal property tax.

Four weeks after taking office, Crist vowed to deliver on a campaign promise to cut property taxes, which he said was as big a burden for many Floridians as skyrocketing insurance rates.

“People are screaming for relief,” Crist said. “Now it’s time for our next step.”

Crist’s tax plans also set up a major political battle with cities, counties and school boards, all of which are expected to mobilize to oppose any efforts to reduce the amount of money available to them.

Crist’s major property tax changes require voter approval, and Crist wants that to happen later this year in a special statewide election.

The four elements of Crist’s package would cut property taxes by more than $4.5-billion statewide over five years, according to a preliminary estimate by the governor’s office.

Crist ran for governor as a fiscal hawk who said cities and counties are spending too much money.

The portable Save Our Homes tax cut and doubling of the homestead exemption were promises made repeatedly on the campaign trail.
But by proposing to create, in effect, a “Save Our Businesses” tax cap, Crist risks creating the same kind of tax inequities for business owners that already exist for homeowners.

After the business tax cap is on the books for a few years, an existing business will have the benefit of a built-in, year-to-year 3-percent tax limit, but a new business arriving in the state will start out paying a much higher tax rate.

Crist acknowledged that many details of his proposals are yet to be worked out. “It will be hashed out in the legislative session,” he said.
Crist’s proposal to double the homestead exemption is not mandatory. If voters approve it, each county commission would subsequently decide whether to put the question before voters in that county.

But Crist said most counties would be hard pressed to deny their constituents the power to cut their own taxes.

His tax cut proposals won immediate support from a leading business group, the Florida Chamber of Commerce.

Chamber lobbyist Mark Wilson said the day of reckoning is coming for cities and counties that have been overspending for years.
The Republican governor already faces mounting opposition from a powerful coalition made up of cities, counties, school districts and special taxing districts that offer an array of services from health care to community redevelopment.

Any reduction in the amount of property taxes available is likely to prompt talk of cuts in basic local services -- from library hours to public safety.

“Counties and cities have had an explosion of more money,” Crist said. “It has been explosive growth, far outstripping what the cost of living is. What they’ll have to do is become financially more disciplined.”

Crist said he will ask the Florida Legislature to schedule a special statewide election later this year so that voters can pass judgment on the proposals.

By law, a three-fourths vote of both houses is required to propose a constitutional amendment in a special election.

In addition, because of a decision made by voters, passage by at least 60-percent of voters is required for the tax proposals in the Constitution.

After announcing the proposals in Tallahassee, Crist was scheduled to travel to Bonita Springs on Florida’s southwest coast, where he was scheduled to be joined by a small business owner who shelved expansion plans because of high property taxes.

Steve Bousquet can be reached at bousquet@sptimes.com or (850 224-7263.
 

[Last modified January 30, 2007, 13:52:49]