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Tax plan erases deep saving
But portability and the preservation of Save Our Homes could help win over voters.
By LEX LEARY and STEVE BOUSQUET, Times Staff Writers
Published October 10, 2007
TALLAHASSEE - The property tax plan Gov. Charlie Crist is aggressively selling to lawmakers would save $6.3-billion over five years - well short of the cuts promised by an earlier plan a judge has deemed misleading.
Still, the proposal would:
-Double the $25,000 homestead exemption and, for the first time, index it to inflation.
-Allow people to keep their Save Our Homes benefit when they move.
-Provide discounts for first-time home buyers.
-Reduce taxes on business equipment.
Unlike the plan it would replace on the Jan. 29 ballot, Crist's proposal would not affect school budgets and preserves Save Our Homes, which caps annual property tax increases at 3 percent, for all primary homeowners.
The changes could help win approval among voters, but the package is at least $3-billion less than the super homestead exemption plan put forth by the Legislature.
In part, that is because the new $50,000 homestead exemption is much less than that offered in the Legislature's plan. In that plan, which lawmakers now seem to have abandoned, the exemption reached $195,000 on a $500,000 house.
While Crist continued to express optimism that consensus on a new plan is imminent, there were signs Tuesday that things might not go as smoothly as he suggested.
"I don't think this plan goes far enough in terms of savings," said Rep. Adam Hasner, R-Delray Beach, the House majority leader. "The more people realize that, the more disappointed they will be."
House Speaker Marco Rubio, R-Miami, remained silent on the issue Tuesday. But he may, as he has in the past, push for even deeper tax cuts - a potential snag that could reopen the debate that divided the Legislature during its special session on taxes in June and derail Crist's hope of opening formal talks as early as Friday.
Crist, who has been promising for months to drop property taxes "like a rock," acknowledged Tuesday that his new plan delivers less relief. But the governor said there's more to come.
He said he would "keep calling plays" on the tax issue, and pointed out that time is a factor. Crist and lawmakers have until Oct. 29 to approve a new ballot proposal to make the Jan. 29 statewide election.
"What needs to be emphasized is whatever we agree to put on the ballot Jan. 29 is not the end," he said.
To win support for his proposal, Crist has been meeting with and calling top members of both parties. He needs Democratic support because putting a proposed constitutional amendment on the ballot requires three-fourths approval.
"Charlie is saying, 'If people are going to hold me accountable, I might as well be more involved in it,' " said Rep. Jack Seiler, D-Wilton Manors, who has negotiated the broad outline of the deal with Crist over the phone. "I think it's leadership."
Crist's plan includes doubling the $25,000 homestead exemption, a figure that has not changed since the 1980s. A draft of the constitutional amendment provided by the governor's office indicates the new exemption would be adjusted annually by increases in the Consumer Price Index.
The new homestead exemption would be measurable - taking an estimated $3.9-billion from local government over five years - but the average taxpayer would get only $214 in savings per year.
"It will take too much money away from local government while doing too little to help taxpayers," said Sen. Steve Geller, D-Cooper City, who otherwise agrees with the governor's proposal.
First-time home buyers - whether those already living in Florida or moving here from another state - would get an additional exemption equal to 25 percent of the just value of the home. The estimated annual savings would be more than $700.
Under Crist's "portability" proposal, a person could take all of their Save Our Homes benefit when moving to a more expensive home. When buying a less expensive house, the homeowners would pay taxes on the same percentage of market value as they did on their old home.
Portability would be popular because many people who enjoy Save Our Homes feel trapped because, for instance, they might pay higher taxes on a less expensive home.
Businesses would get a $25,000 exemption on tangible personal property - far less relief than they want.
But Crist's plan also may be broadened to modify the "highest and best use" rule that requires appraisers to assess business property at its most lucrative possible use. Small businesses on the waterfront, for example, might pay taxes based on their land being used for high-density condos.