Crist offers salve for tax pain
"People are screaming for relief," he says. Services will suffer, local officials say.
By STEVE Bousquet
Published January 31, 2007
TALLAHASSEE - Gov. Charlie Crist on Tuesday called for sweeping property tax reductions, seeking to deliver quickly on a second campaign promise and setting the stage for a fight with cities, counties and school districts.
Crist wants the Legislature to call a special statewide election for the fall and ask voters to decide on three major changes:
- Give counties the option of doubling the homestead exemption, from $25,000 to $50,000.
- Allow homeowners to transfer the Save Our Homes tax cap to a new home. The 3 percent yearly cap on increases in assessments traps many people in their current home, and even downsizing means higher tax bills.
- Expand the tax cap to include businesses, vacation homes and rental units, at 3 percent a year or the rate of inflation, whichever is less.
A fourth proposal by Crist would offer small-business owners a tax break by exempting office equipment worth less than $25,000 from the state's tangible personal property tax.
The package would cut property taxes statewide by nearly $10-billion over five years, the governor's office said.
"People are screaming for relief," Crist said. "It's time to return tax dollars to the people."
Crist kept his proposal to its most basic form, acknowledging that many details will have to be ironed out, chiefly by the Legislature. Lawmakers tried to tackle one of his proposals last year - making the Save Our Homes cap portable - but couldn't reach agreement.
Negotiators had difficulty creating a portable cap that would help people move to a smaller house without being hit with a higher tax bill, while preventing people who upgrade to larger homes from taking a smaller tax bill with them.
Still, legislative leaders, who have cited the property tax system as a barrier to economic growth in Florida, broadly endorsed Crist's call for changes.
But the Florida Association of Counties said a $50,000 homestead exemption would have its most dramatic effects on small, rural counties that have little year-to-year growth in property tax revenue. A dozen of those counties are already at or near the 10-mill limit on the amount of property tax that can be collected for operating budgets.
The county group challenged Crist's description of "pretty nice offices" for local officials and bloated local budgets.
"I don't know where they're getting their numbers from," said Kristin Vallese, a spokeswoman for the counties.
At city and county halls across Florida, Crist's call for widespread property tax cuts got an icy reception.
"Maybe he hasn't thought this through," said Tampa City Council member Linda Saul-Sena.
She said Crist's proposal essentially caps local government revenue growth at 3 percent a year at a time when cities and counties are facing increasing pressures to provide services while grappling themselves with rising costs of insurance, health care, gasoline and other essentials.
"I don't see how we're going to provide the basic services that our citizens expect," Saul-Sena said.
Property tax revenue in Tampa grew by 21 percent last year alone.
Another council member, John Dingfelder, said he would reserve judgment before knowing how it would affect services such as police and fire.
Clearwater Mayor Frank Hibbard said he wanted to fully realize the long-term ramifications of major property tax law changes. He said the inequities that now exist in the Save Our Homes law were not evident when it was enacted 15 years ago.
Hillsborough County Property Appraiser Rob Turner said he feared that cities and counties would simply raise their tax rates to offset the lost revenue.
What Crist did not do Tuesday was endorse a revenue cap, a constitutional ceiling on the amount of money cities and counties can collect each year. Nor did he acknowledge the trend in recent years of the state shifting a greater percentage of the day-to-day operation of school districts to local property taxpayers.
By calling for an expansion of the 3 percent assessment cap to include businesses, apartments and second homes, Crist said he hopes to take some of the property tax burden off those groups.
But in so doing, Crist invites the same type of disparities between older and newer businesses that now exist between older and newer homes.
Crist acknowledged his proposals need a lot of work. But by moving quickly, he hopes to fully exploit the wave of public anger over high property taxes. But doing so won't be easy, or cheap.
An off-year election would cost at least $19-million based on 2005 election cost estimates, according to Sterling Ivey, a spokesman for the state Division of Elections.
Holding an off-year election to amend the Constitution requires a three-fourths vote of both houses of the Legislature.
But even Democrats are climbing the property-tax cut bandwagon. Rep. Dan Gelber, D-Miami Beach, the House Democratic leader, said that property taxes are simply too high and that the public clamor for relief can no longer be ignored.
"A lot of us are looking for solutions that treat everybody fairly and don't push the revenue burden from one group to another," Gelber said. "Florida is not a high-tax state. It's a state that taxes homeowners too much."
Before it tailed off, Florida's real estate boom led to soaring increases in the value of property. That made many homeowners millionaires on paper and allowed cities and counties to keep the tax rate flat and still rake in much more tax money from the previous year.
In contrast to his predecessor, former Gov. Jeb Bush, who championed less-visible tax breaks that chiefly benefited businesses or investors, Crist is taking aim at the property tax, the most unpopular one of all.
As with his demand for reduced insurance rates, Crist said property taxes are rising at a faster rate than people can pay them.
In the same way he cast insurance companies as greedy profiteers, he is now casting local officials as spendthrifts.
"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."
Times staff writers Michael Donila, Will Van Sant, Bill Varian and Janet Zink contributed to this report. Steve Bousquet can be reached at email@example.com or 850 224-7263.
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To discuss Gov. Crist's tax proposal, go to itsyourtimes.com.
The plan: Give counties the option of doubling the homestead exemption, from $25,000 to $50,000.
The issue: Many rural counties with limited population growth already collect property taxes at the highest rate allowed by law. They say the extra exemption would cripple budgets.
The plan: Allow homeowners to transfer the Save Our Homes tax cap.
The issue: The 3 percent yearly cap on increases in taxable home value traps many people in their homes because even a move to a smaller home leads to higher tax bills. The Legislature tried this last year.
The plan: Expand the 3 percent tax cap to include businesses, vacation homes and rental units.
The issue: The tax cap on homes has meant those with property not under the cap have seen tax bills soar. But capping taxes on nearly all property will choke off local government revenue.
To discuss Gov. Crist's tax proposal, visit itsyourtimes.com