County postpones tax break for seniors
By EDIE GROSS
© St. Petersburg Times, published October 31, 2000
Seniors on limited incomes will have to wait at least two years before getting any kind of property-tax break from Pinellas County -- if they get one at all.
County commissioners have toyed with the idea of giving homeowners over age 65 an extra homestead exemption on top of the $25,000 homestead exemption most other homeowners get. But during a workshop on Monday, commissioners -- still unsure what such a tax break might do to the county's bottom line -- agreed to delay any decision until late spring or summer.
Commissioners would have needed to pass an ordinance specifying the extra homestead exemption by Dec. 1 for seniors to see the effects on their November 2001 tax bills. Delaying the decision until April or May 2001 means that if commissioners do agree to an extra tax break, homeowners would not benefit from it until November 2002.
"We just don't have enough answers to put it on the agenda to make a decision about this," said Commissioner Bob Stewart. "As painful as it is to some people not to get this relief, if you look at the big picture, we have some serious problems to address next year."
The county is already facing a $5.5-million deficit in its 2000-01 budget after Florida Power Corp. decided it could not implement a 6 percent tax on the electric bills of unincorporated residents as quickly as the county needed it done.
Two years after Florida voters approved the idea of an extra homestead exemption for seniors, Pinellas County commissioners said too many questions remained about how the tax break would affect their budget.
Under the constitutional amendment approved by Florida voters in fall 1998, counties and cities can give up to $25,000 in an extra homestead exemption to people 65 or older whose annual household incomes are $20,000 or less. The tax break amendment earned the support of 64 percent of the voters in Pinellas County.
Estimates by the Florida Department of Revenue last year indicated that Pinellas County could lose as much as $7.7-million in tax revenues if it gave seniors an additional $25,000 exemption. Based on that figure, commissioners refused to grant the break.
They agreed to give it another look this year after discovering that other Florida communities that approved the tax break did not lose nearly as much money as the state had estimated.
In most cases, fewer property owners applied for the tax break than expected. Still others who applied did not qualify.
New estimates indicate Pinellas County might lose between $1.8-million and $3-million if it approved the extra $25,000 homestead exemption. Under this year's tax rate, a qualified homeowner would save $168.75 a year. But budget director Mark Woodard warned commissioners Monday that the estimates are just that -- estimates.
As years go by and more seniors become aware of the program, more could apply, driving those losses up, Woodard said. Also, there is no reliable data showing how many 65-and-older homeowners qualify for the exemption, he said.
"Only time will tell," Woodard said.
Commissioners are particularly concerned that the tax break could be abused by those who do not really need it. The constitutional amendment indicates that a senior cannot earn more than $20,000 in gross adjusted yearly income, a figure that does not include Social Security benefits, trust distributions and tax-exempt interest.
"It's possible for a household to have income far in excess of that $20,000 and qualify under the current definition of "income,' " Woodard said.
Commissioners said they would lobby legislators next year to update that definition so that only the most needy residents would qualify.
"That needs to be our full-court press," said Commissioner Calvin Harris. "It will cost considerably more if we don't close the income loophole."
Currently, seniors who want to apply for the extra homestead exemption must turn in their federal tax forms to the property appraiser's office. For privacy reasons, many choose not to.
Commissioners said they were worried about efforts by some groups to change that policy so seniors would only have to turn in a signed affidavit attesting to their income. That less-stringent method leaves open the possibility of abuse, said commissioners, who vowed to lobby against the effort.
St. Petersburg recently passed an extra $5,000 homestead exemption for seniors who earn less than $20,000 a year. St. Pete Beach approved an additional $10,000 exemption. Both will take effect in 2001.
The town of North Redington Beach passed the senior tax break effective if the Pinellas County Commission passes the exemption.
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