Politics

Homestead exemption promise doesn't add up

Amendment 1 won't double the exemption, as the governor claims.

By ALEX LEARY, Times Staff Writer
Published January 8, 2008

TALLAHASSEE - Doubling the homestead exemption!

The idea sounds simple, significant - and it's Gov. Charlie Crist's No. 1 weapon in selling the property tax cut plan that goes before voters Jan. 29.

The poll-tested concept has rolled off his tongue in public appearances from Miami to Tallahassee. He used it again Monday in Broward County to promote passage of Amendment 1.

But to say the measure would double the current $25,000 homestead exemption is misleading.

The provision does not apply to school levies, which make up about 40 percent of the average property tax bill statewide. Taxes for cities, counties and special districts make up the other 60 percent.

Crist would be more accurate to say the measure would "increase" the exemption. The overall impact equates to getting another $15,000 exemption, not another $25,000.

For the average homeowner, that translates to a savings of $240 annually, according to the governor's estimates.

"I've been describing it as an iPod for every Florida homestead," joked state Rep. Dan Gelber, D-Miami Beach, who opposed the plan.

The increased homestead exemption would cut taxes for homeowners about $4.6-billion over five years. In 2007 there were 4.4-million homesteads in Florida and the exemption (low-income senior veterans get an extra break) reduced the tax roll by $111-billion, or 15 percent.

Earlier property tax cut plans would have doubled the exemption, which has been at $25,000 since 1980. The idea was a centerpiece of Crist's bid for governor in 2006. It was favored by lawmakers because it is easy to understand and polls showed it had high approval. More than anything, "doubling the homestead" was viewed as the vehicle for success on Jan. 29.

But Crist and the Republican-led Legislature were forced to exclude schools from the mix to satisfy Democrats and some Republican senators, whose votes were critical to placing the plan on the ballot.

Voters who enter the polls in three weeks will read that the exemption does not apply to schools, so there is no attempt to mislead.

But Crist and other backers do not readily supply that caveat when talking about the plan in public.

"If you can help us say it better, that would be great," said Sen. Mike Haridopolos, R-Melbourne, who helped lead the tax discussions through the regular legislative session and two special sessions.

"I say it's better than what you have currently, and it's moving the ball forward," Haridopolos said. "This is the first step in our plans to cut property taxes."

Crist could not be reached Monday. He spent the morning in Hollywood, mainly emphasizing the other part of the proposal - a concept known as "portability."

"This tax cut allows home-owners the portability to take their Save Our Homes tax savings with them when they move, and it doubles the homestead exemption providing great savings for Floridians," Crist said in a statement after visiting with a family that would benefit from portability. "Amendment 1 will bring real tax cuts to real people."

Exaggerated or not, the plan faces significant hurdles. Crist is opposed by a broad coalition of teachers, firefighters and others who say the cuts will provide little relief to those who really need it - the plan does little for businesses, for example - while hurting local services.

But opponents need to mind the facts as well. Some have decried the plan as cutting more than $12-billion from local governments and schools. That used to be true, but the worsening housing economy has led state economists to put the five-year savings at $9.3-billion.

This story, which also appears on tampabay.com, is an expansion of PolitiFact, a project of the St. Petersburg Times and Congressional Quarterly to help determine the truth in politics. For analysis of the presidential campaign, turn to politifact.com.

The statement

"This tax cut ... doubles the homestead exemption providing great savings for Floridians." - Gov. Charlie Crist, in a statement Monday after visiting a family in Broward County that would benefit under the tax proposal.

The ruling

What the Florida governor says on the stump about doubling the state's $25,000 homestead exemption doesn't match what lawmakers actually put on the Jan. 29 ballot.

To win enough votes from Democrats and some Republican senators, Republican leaders exempted school taxes from the provision that adds an additional $25,000 homestead exemption. School levies make up about 40 percent of the average overall property tax bill statewide, leaving only 60 percent of taxes affected by the additional homestead exemption created under Amendment 1. So, the impact will be more like getting an additional $15,000 exemption (60 percent of $25,000), not another $25,000.

Since the new homestead exemption would be worth only about 60 percent of what supporters say it is, we rule this statement half-true.

Sources: Ballot Summary, Amendment 1, Jan. 29 ballot, election.dos.state.fl.us; Florida's Property Tax Study Interim Report, Legislative Office of Economic and Demographic Research, Feb. 15, 2007; "Senate Reveals Final Tax Proposal," St. Petersburg Times, Oct. 29, 2007; Impact of Property Tax on Average Homeowner, Executive Office of the Governor, Florida House of Representatives.

[Last modified January 7, 2008, 22:50:13]