Tax cuts not for everyone

A House plan wouldn't help many at the lower end.

Published May 18, 2007

A leading legislative proposal to trim Florida's property-tax bills would save the average homeowner about $1,500, or more than 50 percent. But the savings would not be distributed evenly.

A St. Petersburg Times analysis of county property appraiser data has found that about 55,000 homeowners in Pinellas and Hillsborough counties, or one in 10, would not gain a penny under a plan recently floated by House Speaker Marco Rubio, R-Miami.

Many of those who would be left behind live in lower-cost housing, including mobile homes or over-55 condominium communities. Forty-one percent of those owning property worth less than $100,000 would not benefit from the cuts. About 98 percent of those who own homes valued between $200,000 and $1-million would.

Some would save more than others. For example, owners of Hillsborough County homes worth $1-million or more would enjoy an average tax cut of $8,000.

Rubio, whose proposal will be debated Monday by a joint House-Senate committee on property-tax reform, is not worried. In an interview Thursday, he said most of those who would not benefit from the plan are poor, elderly homeowners who pay very little under the current system, would likely receive additional targeted support, and would be allowed to remain under the existing system if it benefited them.

"My pet issue is the poor seniors. But those aren't the people that are generally complaining," Rubio added. "Would they take a tax cut? Sure ... but you want to focus on the people who are paying more."

What about helping poor families with young children? "Hey, I'm all for it," said Rubio, 35. "I don't have to be persuaded to reduce the tax burden." He initially proposed to eliminate property taxes entirely on primary residences and recoup some of the lost revenue by raising the sales tax. Weak support led him to drop the idea.

Rubio's revised proposal would mark a sharp departure from current property-tax law.

Under the present system, a homeowner who qualifies for a $25,000 homestead exemption is enrolled in the Save Our Homes program. Created to protect homeowners from the increased tax burden normally associated with rising property values, it caps the annual increase in the taxable value of a home at 3 percent.

The Rubio plan, adapted from an idea suggested by Rep. David Simmons, R-Maitland, would eliminate the homestead exemption and Save Our Homes program. Instead, it would exempt from taxation 80 percent of the first $300,000 of a home's value, 70 percent of each dollar between $300,000 and $1-million, and 30 percent of every dollar above $1-million.

Rubio said he believes his plan will boost the Florida economy by eliminating Save Our Homes, which he called an artificial drag on home sales, and put more cash in residents' pockets.

But county property appraisers who assisted the Times with its analysis - and who admit having a vested interest in robust local governments - were critical of the direction of the property tax debate in Tallahassee.

"I had a feeling that the people at the low end of the housing spectrum would get nailed, and they do," said Pinellas County Property Appraiser Jim Smith.

"I almost get the sense that these plans are thrown out there, and it's like the leadership says, 'Let's see what the response is,'" said Hillsborough County Property Appraiser Rob Turner. He served on a statewide property-tax reform commission that Gov. Charlie Crist recently disbanded.

Things could be worse for the 55,000 homeowners who would not benefit from the Rubio proposal. Rubio and other House leaders said they are committed to seeing that no homeowner ends up owing more taxes under a reform plan than they would under the current system.

If not for that commitment, the 55,000 would see their taxes increase an average of 49 percent, or about $300 apiece.

Times staff writer Alex Leary contributed to this report. Scott Barancik can be reached at barancik@sptimes.com or 727 893-8751.

Not everyone wins
A proposal by House Speaker Marco Rubio would cut the average tax on primary residences in Pinellas and Hillsborough counties by more than 50 percent. But owners of lower-cost housing are less likely to benefit. This table shows the percentage of homeowners who would benefit, by housing value.
 Market value*Total homes** Percentage
tax cut
$0 to $50,000 6,644 32%
$50,001 to $75,000 19,250 50%
$75,001 to $100,00038,552 68%
$100,001 to $200,000274,07592%
$200,001 to $300,000118,64598%
$300,001 to $1,000,00089,32797%
$1,000,001 to $2,000,0004,85882%
$2,000,001 to $3,000,00061259%
$3,000,001 and up20448%
* "Just market value" as determined by county property appraisers
** Primary homes that receive the homestead deduction
Source: Pinellas and Hillsborough counties' property tax appraisers

Fast Facts: Heads up
Members of the Joint Select Committee on Property Tax Relief and Reform, led by Rep. Dean Cannon, R-Winter Park, and Sen. Mike Haridopolos, R-Melbourne, will meet Monday to discuss the Rubio proposal.