Tax break passes first test

Dunedin commissioners support an ordinance giving property-tax relief to low-income homeowners 65 and older.

By LEON M. TUCKER

© St. Petersburg Times, published October 22, 2000

DUNEDIN -- City commissioners have given their tentative approval to an ordinance that would give low-income homeowners 65 or older a $41 break in property taxes next year.

If the ordinance passes at the next commission meeting in November, roughly 5,733 senior residents whose annual household income is less than $20,000 will be able to take advantage of the new tax break, a special $10,000 exemption on property taxes, which would begin Jan. 1.

Commissioners, who approved the measure on first reading, must take a second vote before it becomes official. In 1998, voters authorized Florida cities and counties to provide low-income seniors an additional homestead exemption of up to $25,000. Hillsborough County and St. Pete Beach already have approved tax breaks for seniors.

Two weeks ago, the St. Petersburg City Council decided to give residents there over 65 with household incomes of less than $20,000 an additional $5,000 homestead exemption -- a savings of about $35 affecting between 3,162 and 9,486 households and costing the city less than $350,000.

"It's going to be a substantial benefit to some of the low-income people who are having difficulty paying their bills," said Dunedin Mayor Tom Anderson.

But there are some problems.

Senior homestead exemptions have been controversial because local governments, including Dunedin, are not sure how many people will take advantage of it or how it will affect tax revenues.

"We don't really know what the cost will be," said Dunedin Commissioner John Doglione. "And what percentage of those whose income is under $20,000, your guess is good as mine."

If the city receives 1,000 applications, it would cost Dunedin $41,000 in tax revenue a year.

"A very minor percentage of our total revenue," Anderson said.

Commissioners, however, are questioning the accuracy of the 1990 census figures used in calculating how many seniors would be eligible for the breaks. They also fear that some may try to appear eligible by providing false information.

"I think there's going to be some of that occuring," Anderson said. "But I would guess 90 percent to 95 percent of the people applying are going to be people in need."

Anderson said the city would look into asking state legislators to restructure the state law so it would, for example, allow tax-exempt interest earned by applicants to be calculated in their adjusted gross income.

"If that could be put back in, that could eliminate some possibility of abuse," Anderson said. "We're going to try to send something up to Tallahassee to see if they can change some of the requirements."

- Information from Times files was used in this report.

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