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Impact on schools worries senators
A cap on property assessment increases could cost billions. Deadline for a deal is Tuesday.
By ALEX LEARY, Times Staff Writer
Published October 27, 2007
TALLAHASSEE - This is the situation on the Legislature's effort to craft a plan to cut property taxes:
The deadline to put a property tax package on the January ballot is Tuesday. The House and Senate, which have different proposals, won't return until Monday. And as of right now, there is no deal.
That could change over the weekend, when the Senate may revise its proposal. Or it may not.
On Friday, Senate President Ken Pruitt, R-Port St. Lucie, sent a letter telling senators to return for a 9 a.m. session Monday, adding that the staff had been working feverishly to analyze the fiscal impacts of the House proposal.
"Based on the progress they have made, it is my opinion that we will have the necessary information to proceed."
House Speaker Marco Rubio, R-Miami, responded in turn, calling his chamber back for 11 a.m. Monday.
The fiscal impact that most concerns the Senate comes from a House plan to give owners of nonhomestead property (businesses, owners of second homes) a 5 percent cap on annual assessment increases. The House believes this provision levels the playing field for taxpayers who have shouldered a disproportionate tax burden.
But the Senate worries about the impact on education funding. It released an analysis Friday showing that over a decade, the 5 percent cap would cost education more than $6-billion.
While the Senate seemed to initially dismiss the cap outright, the staff spent hours over the past two days analyzing its impact, suggesting the idea was in play.
Possible compromises with the House include increasing the annual assessment limit to 7 percent and/or excluding schools.
"I can tell you Senate Democrats will not be voting for a 5 percent cap in its current form," said Sen. Steve Geller, D-Cooper City. But Geller did not rule out some other version of a cap.
The 5 percent cap constitutes the biggest, but not only, difference between the House and Senate.
The Senate would double the $25,000 homestead exemption - a move that enjoys overwhelming public support, according to a statewide poll.
The Senate would also give a break to first-time home buyers and allow people to carry accrued Save Our Homes benefits when they move. Those components are backed by Gov. Charlie Crist.
The House trades the break for new homeowners and the extra $25,000 exemption for a break equal to 40 percent of the median value in a county. The House also provides Save Our Homes portability.
The total tax savings over four years for the House plan is a bit over $11-billion. For the Senate, the figure is just under $10-billion.
Thirty votes are needed in the Senate to pass a constitutional amendment for the January ballot, and there are only 26 Republicans. So Democrats will play a key role.
The top House tax negotiator, Rep. Dean Cannon, R-Winter Park, said variations on the House cap plan are worth considering but reaffirmed his chamber's insistence on a cap.
"While nothing is absolute, that is something that is very important to our members," he said. "It would be fair to say that I am as optimistic as ever."
On the homestead exemption, senators know that the idea of a doubled homestead exemption is popular and may be unwilling to go along with the House's exemption based on median home values. They worry about the effect on poor cities and whether it is too complicated, dashing hopes for passage in January.
"We need to ensure that the product put on the ballot can be clearly explained, can withstand legal challenge and that each idea can stand or fall on its own," Sen. Paula Dockery, R-Lakeland, wrote in a letter Friday to the presiding officers and Crist.
Dockery argued Friday the 25 percent assessment break for first-time home buyers must be included to offset constitutional issues with Save Our Homes portability.
With time running out, there is no room for glitches. And failure to pass a deal could lead to great political fallout.
"If we don't accomplish something now," said Sen. Mike Fasano, R-New Port Richey, "many of us won't be returning in 2008, regardless of political affiliation."