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Property tax plans require closer look

Published June 12, 2007


The first thing the Florida Legislature should do today when it opens its special session on property tax relief is call time out. It would be foolish for House Speaker Marco Rubio and Senate President Ken Pruitt to force quick votes on fundamental changes to the tax system that were written in secret and have had little public scrutiny. Even at first blush, the complicated proposals are at best a mixed bag that provide the least relief to property owners who need the most.

Most alarming is a constitutional amendment that would create a so-called super homestead exemption. It would exempt 75 percent of the first $200, 000 in value and 15 percent of the next $300, 000 in value. So a home valued at $400, 000 would be taxed on $220, 000 - just 55 percent of its just value. That's too generous.

If the size of the exemption is not a dealbreaker, here's another one. Unlike previous proposals, this constitutional amendment would affect public education and cut school revenue by $7-billion over four years. Republicans promise the state would make up the money but haven't offered specifics. A Legislature that just counted on nearly $550-million in additional property tax revenue to pay for schools while hypocritically complaining about local government relying on soaring property values simply can't be trusted to do the right thing.

There is something attractive about the concepts behind the super homestead. It attempts to be progressive with its tiered approach. It addresses problems created by Save Our Homes, such as wildly different tax bills for similar homes and the loss of the tax break when homeowners move. The idea is to create a benefit enticing enough to convince voters to replace Save Our Homes and the existing $25, 000 homestead exemption. Homeowners who fare better under Save Our Homes wouldn't even have to switch.

But the concept needs work, and lawmakers should reject the current version. It does not help businesses and other nonhomesteads who need relief the most. It gives too much relief to primary homeowners, causes too much pain for local governments and is a nonstarter until questions about school funding are resolved.

A second proposal, freezing property tax revenues for 2007-08 at current levels and requiring an additional cut of 9 percent or less, probably would not be as catastrophic for most cities and counties. Many local officials acknowledge it could have been worse, given the disdain Rubio and other lawmakers have shown for local decisionmaking. But doing better than the worst-case scenario should not be the measuring stick for sound public policy. To cut property tax revenue by roughly $13-million in St. Petersburg, $6-million in Clearwater, $12-million in Hernando County or $40-million in Hillsborough County would require noticeable cuts in services and eliminate opportunities for enhancements.

Beyond the dollar amounts, there are broader issues to consider. Despite a good-faith effort by negotiators to assign cuts to cities and counties by the size of their appetites for money, there is no way to measure from Tallahassee whether local officials made prudent budget decisions. One county commission could have been wise to invest in needed parks or programs, while another could have cut taxes and neglected services. The wisdom of those decisions is best evaluated by local voters, not state legislators. Requiring local officials to go through all sorts of supermajority votes to avoid the cuts or future revenue caps further erodes local decisionmaking.

If Rubio and Pruitt are serious about tax relief, they will slow this train down before it jumps the tracks and voters are once again asking why the Legislature failed to deliver.

[Last modified June 11, 2007, 21:51:42]

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