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Tax plan floated as talks near
By ALEX LEARY
Published May 17, 2007
TALLAHASSEE - House Democrats on Wednesday reinserted themselves in the property tax debate with a plan for "super homestead exemptions" based on half the median home value in a county.
The plan - which had all but been ignored previously by Republican leaders - would cut tax bills in half for new or relatively new homeowners, while preserving the benefits accrued by longtime homeowners.
"If you deliver relief through use of exemptions, then what you are really doing is giving it only to those folks who really need it, " said Rep. Dan Gelber, D-Miami Beach.
Democrats also call for up to $250, 000 in exemptions for commercial property, with growth for inflation, and breaks for second-home owners equal to one-fourth the median value in a county.
Local and state budgets would be frozen for one year, to provide quick tax cuts for everyone, then those budgets would be allowed to grow in pace with personal income growth.
School budgets would be affected by the cuts, unlike in other plans that have exempted school districts. But Democrats said the intent is to shift more of the cost of schools to state government, reversing a trend.
The combined tax savings in one year: between $4-billion and $5-billion.
While some Republicans questioned the savings, noting that the average homeowner may only pocket a few hundred dollars, the plan is not radically different from one outlined last week by House Speaker Marco Rubio, R-Miami.
"The approach is pretty much something that there's growing consensus on, " Rubio said Wednesday. "The debate is now focused on how much to save."
Gov. Charlie Crist said he was aware of the Democrats' plan. "I'm very impressed by it."
Under a House Republican proposal, homestead exemptions would be based on percentages. The first $300, 000 of property would get an 80 percent exemption, for instance.
The Democrats tie the exemption to the median home value in a particular county. But newer homeowners benefit more than longtime owners who have not seen sharp increases in their tax bills because of Save Our Homes, the 3 percent annual cap on assessments.
Here's an example of how the Democratic plan would work: The median home value in Hillsborough County is $158, 685. A person who bought a home last year valued at $250, 000 would get the standard $25, 000 exemption plus a deduction equal to half of the median home value or $79, 343.
So they would pay taxes on $145, 657. Their bill would be $3, 350, or $2, 400 less than under the current property tax structure.
Half the median value in Pinellas is $79, 200; the figure is $63, 676 in Pasco, and $63, 484 in Hernando.
"The advantage of this, obviously, is that places that have huge housing costs get larger exemptions, " Gelber said.
People whose tax bills are lower than the new plan, because of Save our Homes, would keep that benefit.
And people over 65 with a combined household income of less than two times the poverty level get an exemption based on the full median value.
Like plans put out by House Republicans, the Senate and Crist, voters would have to approve changes during a special election, possibly this fall.
House and Senate negotiators are to meet Monday to begin preliminary discussion, then again June 4 before the special session begins June 12.
Staff writer Curtis Krueger contributed to this report.