Leaders agree on deal to cut property tax, benefit all owners
By Mark Hollis and Linda Kleindienst
June 2, 2007
TALLAHASSEE · Florida home and business owners would see their property taxes drop this fall under a promising yet vague tax-cutting deal agreed to by top legislative leaders and announced Friday.
Heralding a potential end to the Legislature's stalemate on how to trim property taxes, House Speaker Marco Rubio and Senate President Ken Pruitt unveiled the framework of a plan requiring cities and counties to reduce taxes this year, and tying any and all future tax increases to growth in personal income. Only school taxes would be unaffected.
The agreement, skimpy on specifics, also calls for long-term tax relief through a constitutional change in Florida's homestead exemption rules that would grant homeowners varying tax breaks according to the value of their homes.
The new exemption would benefit all categories of property owner -- including year-round residents, snowbirds and owners of commercial property. At the moment, only permanent Florida residents are entitled to a uniform $25,000 homestead exemption.
There was no indication how much in tax savings individual homeowners would achieve or how deeply local government budgets might be slashed.
"If they told me that we had agreed on [the amount of tax cuts], then I'd say, `Great.' But the tougher part to agree on is the number, and we haven't gotten there," said Senate Democratic Leader Steve Geller of Cooper City.
Gov. Charlie Crist told the South Florida Sun-Sentinel in a phone call from Israel that the legislative dealings were "on a good track" and he was optimistic .
For the past month, lawmakers have been back in their home districts, many getting an earful from homeowners and business leaders about property taxes. The Legislature failed to act on the matter this spring, and will try again during a special session June 12 to 22.
The tax cuts, which would appear on the tax notices sent this fall, would be based on a formula tied to the tax increases in each city and county over the last five years, penalizing those governments most whose taxes have grown the most per capita.
"We believe ... a mutual commitment to reducing the tax burden on all Floridians will yield meaningful results," Rubio and Pruitt, both Republicans, said in a letter to fellow legislators.
The letter was issued as a key panel of House and Senate members plan to resume negotiations about property taxes Monday.
"It's incumbent we do something because the status quo is unacceptable," said Sen. Mike Haridopolos, R-Melbourne, chairman of the Senate Finance and Tax Committee.
Lawmakers had been at loggerheads over both the method and the amount for tax cutting. Now, because of Friday's accord on an approach, the Legislature's focus may shift to how much and how fast to trim taxes.
"There's a need for immediate relief," said Rep. Jack Seiler, D-Wilton Manors. "We are also going to ...provide people a glimpse of the cavalry on the horizon."
Voters would be asked to approve the homestead exemption change in a special election, later this year or more likely on Jan. 29, the date set for Florida's presidential primaries.
Although Rubio, of West Miami, and Pruitt, of Port St. Lucie, said they had made "excellent progress," they acknowledged much hard work remains. They said a "thorough fiscal analysis" of the impact of the proposed changes on cities and counties must be conducted.
Adding to the political complications is the fierce resistance from counties and municipalities whose budgets would be curtailed by a loss of property tax revenue. House Republicans, led by Rubio, insist Floridians want big tax cuts and aren't worried that local government services or jobs might suffer as a result.
"My sense is that the public is saying: `Enough is enough. We want a cut, and a big one,'" said Rep. Ellyn Bogdanoff, R-Fort Lauderdale. "With all due respect to local officials, I don't believe the citizens are on their side."
The resulting decrease in taxes and the ceiling on future increases could be overridden by a voter referendum or a super-majority vote of the local governing body. For example, an override by a five-member city commission would require four votes.
With much of the state's real estate market idle until the Legislature takes action on property taxes, Florida's economy is in a virtual holding pattern as well, legislators say.
"There are a lot of people waiting to get direction from the Legislature before deciding whether to buy a home," said Sen. Ted Deutch, D-Boca Raton. "Small business owners ...depend on growth, but they're observing a real lull."
Mark Hollis can be reached at email@example.com or 850-224-6214.
Linda Kleindienst can be reached at firstname.lastname@example.org or 850-224-6214.
To read the three-page letter outlining the framework on how to cut property taxes go to Sun-Sentinel.com/propertytax.
Read the Florida Legislature's full update on property tax reform and tell us what you think on our blog at Sun-Sentinel.com/
Any agreement would have to be adopted by the full Legislature, which meets in special session June 12-22. A joint House-Senate committee meets Monday to resume negotiations on property tax cuts. 2A