Basics of tax relief get nod
Top legislators reach a pact, short on details, that would roll back rates and set caps.
By ALEX LEARY
Published June 2, 2007
TALLAHASSEE - If Florida property owners are to see relief in 2007, it will likely stem from a hard-fought agreement signed Friday by the state's top two legislators. They pledged to force local governments to roll back property tax rates immediately and cap future increases.
More substantial relief, however, would wait until at least 2008, when voters would be asked to jettison the popular Save Our Homes program in favor of a new, supersized homestead exemption.
"We hope that you are as encouraged as we are with the excellent progress made," Senate President Ken Pruitt and House Speaker Marco Rubio wrote in a letter to colleagues announcing, for the first time, some basic agreement on how to overhaul the state's property tax system.
The Legislature returns June 12 for an 11-day special session on the topic. Gov. Charlie Crist, on a trade mission in Israel, said, "I think we're really close."
But there are still no specifics on how much tax relief individual property owners might see this year -- or how much local government budgets will be whacked.
Pruitt and Rubio did offer for the first time deference to local governments' complaint that changes should not be one-size-fits-all.
Under their agreement, rate rollbacks would be set individually for local governments, with the deepest cuts for those where tax revenues have grown the most in the past five years. More fiscally conservative governments would face lesser cuts. However, also taken into consideration would be population growth.
"Those jurisdictions whose taxes have grown the most on a per capita basis will be required to reduce them the most," Pruitt and Rubio wrote.
Statewide, property tax collections to all local governments grew 83 percent between 2001 and 2006. By comparison, Tampa Bay's county governments' tax collections increased 69 percent in Hillsborough, 59 percent in Pinellas, 60 percent in Pasco and 105 percent in Hernando.
Schools would not be affected. And special consideration would also be paid to rural, property-poor counties and special taxing districts such as those for hospitals and fire services.
Revenue collection would be capped based on personal income growth. However, governments could override the cuts or cap through a supermajority vote of a council or commission or by voter referendum.
"That's ridiculous. The local budgets are almost overwhelmingly approved anyway," said David McKalip, a St. Petersburg neurosurgeon who heads the citizen group Cut Taxes Now.
Elsewhere, the lack of detail Friday and past promises of agreement led to mixed reaction.
"It's a teaser. ... I need details," said Pinellas County Commissioner Susan Latvala, who is also president of the Florida Association of Counties.
Without more specificity, Latvala said she could not assess the impact.
"I hope it means that they understand one size does not fit all, and that what may work in Pinellas County may not work in Suwannee County," Latvala said.
If endorsed by the full House and Senate, the rollback and cap could result in savings in November tax bills because it does not require changing the state Constitution. The savings also apply to all property owners, including businesses and snowbirds.
But Pruitt and Rubio's plan is a trickier matter when it comes to creating a super homestead exemption, because it will require voters to approve a state constitutional amendment.
Lawmakers had been aiming for a special election this fall but have decided to put that off until the Jan. 29 presidential primary, according to Sen. Mike Haridopolos, a Melbourne Republican who has been involved in behind-the-scenes negotiations between the House and Senate.
"It gives the public six months to decide how the exemption benefits them," he said. "If they say we don't like this approach, we have the ability to go to another session and address that issue and give (the vote) another shot, maybe in the summer."
On Friday, Pruitt and Rubio ruled out one of the three exemption methods in play -- a Democratic scheme to tie the value of homestead exemption to the median home value in each county. The leaders said that could create vast inequities.
Instead, negotiators will focus on an exemption based on the percentage of an individual home's value. For example, 60 percent of the first $300, 000 could be shielded from taxes.
Exact percentages have not been established -- a potential sticking point in negotiations. Rubio has pushed for deeper cuts, while Pruitt and others are less inclined to slash local governments.
There is one agreement: Anyone who saves more under the current Save Our Homes program would keep that benefit. Save Our Homes caps increases in taxable values of homesteaded properties to 3 percent annually.
Times staff writers Will Van Sant, Asjylyn Loder and Steve Bousquet contributed to this report.
Senate President Ken Pruitt and House Speaker Marco Rubio's agreement has two tiers:
Rate rollback: A new state law would require all cities and counties to cut local property taxes at least some in 2007. However, the plan would force up to three deeper levels of cuts in jurisdictions where taxes have grown the most in previous years. But there's no agreement on what the minimum or maximum tax cuts would be for individual property owners.
Super homestead: Voters would be asked in 2008 to replace Save Our Homes, which caps property tax increases for homesteaded property owners, with a super homestead exemption that is a percentage of the home's overall value -- for example, 60 percent of the first $300,000 in assessed value. However, no agreement has been reached on the percentage amount.
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