How would proposed change affect you?
By JENNIFER LIBERTO
Published June 12, 2007
Where do we stand right now?
Lawmakers meet Wednesday to begin debating a two-part plan to lower property taxes. One part would force local governments to roll back their tax rates and the other part would create a big, new homestead exemption.
Will the new 'super' homestead exemption eliminate the Save Our Homes cap?
For most people, yes. Some longtime homeowners, especially in places where property values have risen very sharply, will be better off keeping the Save Our Homes cap that limits the growth of taxable value to 3 percent a year. In those cases, homeowners will be allowed to keep the Save Our Homes cap (and the lower tax bill) until they move.
The $25, 000 homestead exemption also would disappear.
So, how would the 'super' homestead exemption work?
Under the proposal, 75 percent of the first $200, 000 in home value would be exempt from taxation. Then another 15 percent of the next $300, 000 in home value would be tax exempt. A minimum exemption of $50, 000 would be guaranteed for homes worth less than $200, 000.
Would I get to choose between Save Our Homes and the new exemption?
No. The state or county tax appraiser would move you into the tax plan that saves you more. If your tax savings would be greater under the new 'super' homestead exemption, you would lose your Save Our Homes cap.
And this homestead idea requires a statewide vote?
Yes. The tax exemptions for primary residences, homesteads, are outlined in the state Constitution, which can be modified only through a popular vote. The plan, like all constitutional amendments, would need a 60 percent majority.
When do we get to vote?
If three-fourths of the Legislature passes it (that's 30 senators and 90 House members), then the question would go to voters on Jan. 29 along with the presidential primary.
If lawmakers fall short of that, it's possible the tax plan could end up on the general election ballot on Nov. 4, 2008, which could be done with a smaller majority of the Legislature, three-fifths (24 senators and 72 House members).
When they talk about "rolling back" taxes for cities and counties, what exactly would get rolled back?
The "rollback" refers to the revenue that cities and counties collect from property taxes; it's not the entire budget. Local governments also raise money through such things as fees and franchise agreements with cable companies, which wouldn't be affected. Still, property taxes are an enormous part of a local government's revenue stream, and property taxes also fund an array of specialty taxing districts for such things as mosquito control and hospital service. All of those tax-raising groups would have to roll back their tax rates.
What about school districts?
School districts would be exempt from the rollback.
But I thought I heard complaints about cuts to school districts; what's that about?
Although school districts wouldn't have to roll back their tax rates, they wouldn't be immune from the effects of the "super" homestead exemption, which would bring in a lot less money for all government functions. Under the plan, school districts would lose more than $7-billion over 5 years. Top lawmakers pledge to restore that lost money when the Legislature does its annual budget during the regular session next spring, but Democrats are doubtful.
When is the soonest I would see savings under any of this?
November. Local governments will be completing their budgets later this summer, and if the rollback program is approved, those budgets will be smaller than they were this year.
How much money would I get back under the rollback?
There are tons of variables for individuals because each city and county has many different taxing districts with many different tax rates. But lawmakers have calculated a statewide average of $174 for homeowners. Commercial land owners would save $941.
Can my local government refuse to lower my tax bill and override these plans?
Yes, but it's difficult. Depending on the cuts they want to override, they will need anywhere between a simple majority to a unanimous vote. Also, if they want to raise your taxes, they would have to ask first by a public referendum.
Times staff writer Alex Leary contributed to this report.