Legislature passes property tax-cutting package
Primary homeowners would have the choice of getting a new tax break or keeping the one they have as part of a two-pronged plan the Legislature passed Thursday to cut soaring property taxes by billions of dollars.
Lawmakers, meeting in special session, added the taxpayer choice provision to a proposed state constitutional amendment that will go on the Jan. 29 presidential primary ballot for voter approval after narrowly passing in both houses.
The Republican-sponsored amendment, aimed at slashing homeowner taxes and eliminating inequities, passed in the Senate with only one vote to spare, while the House passed it by just two votes more than the minimum of three-fifths in each chamber.
It has drawn opposition from Democrats, local governments, teachers, police, firefighters and others, but the other part of the plan, a bill to roll back and cap taxes, passed with nearly unanimous bipartisan support.
"We tried to do in this whole package three things: relief, reform and protection," said Senate Majority Leader Dan Webster, R-Winter Garden. "You get all three."
Gov. Charlie Crist who calls himself "the people's governor," began beating the drum for tax cutting during his election campaign last year.
"We've got half of it; now the people get to finish the job," Crist said after lawmakers adjourned. "It is power to the people to bring about this largest tax cut in the history of Florida."
Crist and the Legislature reacted to complaints about skyrocketing bills mainly from new home buyers, owners of second homes, landlords and business owners, who don't get the same breaks as longtime homeowners. The situation was exacerbated by rapidly rising real estate values.
Webster negotiated the choice provision during a 1:30 a.m. phone call with the amendment's House sponsor, Rep. Dean Cannon, R-Winter Park. It was in response to qualms by some Republicans who said they were worried the amendment's new "super exemption" might not be such a good deal in the long run, although most homeowners would benefit immediately.
That change, though, makes it impossible to estimate average taxpayer savings or the amendment's overall savings. The original amendment would have cut property taxes by $16 billion over five years, but Webster said the change could drop that to about $8 billion over the same time assuming half of the homeowners choose each option.
The original estimate for the plan was $31.6 billion in savings over the next five years. If half of the homeowners opt for the super exemption, overall savings would drop to about $24 billion.
The Senate unanimously passed the rollback and cap bill after a 117-1 vote in the House with Rep. Jim Waldman, D-Coconut Creek, in dissent.
The amendment passed the Senate 25-12 - one over the 24-vote minimum - on a straight party line vote. The House then passed it 74-43 with Republican Rep. Carl Domino, of Jupiter, joining Democrats in opposition.
Democrats argued it still fails to help taxpayers who need it most, would force local governments to lay off police, firefighters and other employees and chop billions from public schools.
"There have been too many politicians telling the voters they can have deep, deep tax cuts and that it will not in any way affect services," said Senate Democratic Leader Steve Geller of Cooper City. "That is not an accurate statement, and the voters deserve better."
The choice provision, though, may help the amendment at the polls.
"Any lengthy constitutional amendment, especially with a 60 percent vote, is going to be a tough sell," Webster said. "This may make it easier."
The Save Our Homes Amendment voters adopted in 1992 limits assessment increases on primary homes, known as homesteads, to 3 percent annually.
The revised new amendment would let taxpayers stay under Save Our Homes or take the super exemption that would knock 75 percent off of the first $200,000 of a home's value and 15 percent off the next $300,000.
Homeowners or their heirs could opt to switch to the super exemption at any time, but once they do they cannot go back to Save Our Homes.
The original version would have required all primary homeowners benefiting from the new exemption in the first year - an estimated 73 percent - to take it even though Save Our Homes might have saved them more in the future.
One of the measure's main purposes is to start phasing out the Save Our Homes Amendment and the inequities it has caused. It has shifted tax burden from longtime homeowners to new buyers and non-homestead properties.
Homeowners also said Save Our Homes has made them feel trapped because they would lose benefits if they moved. That wouldn't be a problem with the super exemption because it's not linked to how long a taxpayer has owned a home.
The rollback bill, which does not need voter approval, would require cities, counties and independent special districts, but not school boards, to reduce taxes and then cap them with allowances for new construction and growth in personal income.
It also would let local governments override those limits by more than a majority vote or through local referendums.
Both chambers unanimously passed a third measure to put the amendment on the presidential primary ballot instead of waiting until the next general election in November 2008.
House Speaker Marco Rubio, R-West Miami, and Senate President Ken Pruitt, R-Port St. Lucie, called a special session that began Tuesday after lawmakers were unable to agree during their regular session that ended May 4.
Working behind the scenes, Rubio, Pruitt and other leaders put the final tax-cutting plan together.
Republicans acknowledged that, while schools are exempt from the bill, the amendment would cut their revenues by billions. GOP leaders say they intend to replace those lost dollars, but the amendment doesn't require that and they have not offered any specifics.
Webster cited a provision in the Florida Constitution that makes providing a high quality system of public schools a "paramount duty" for the state.
"The reason education gets funded on rainy days, the reason it gets funded on bright days is because it's the supreme duty," Webster said.
Democrats, though, said the Legislature in recent years had done that mainly by increasing local property taxes and that they don't trust lawmakers to make up for the new cuts.
"When this amendment passes, it's going to pour on public education," said Sen. Ted Deutch, D-Boca Raton.
Most city and county officials have agreed tax cuts and restructuring are needed and many have accepted the statutory measure, but they remain opposed to the amendment. They say it cuts too deep but also object to a provision that requires the Legislature to limit local tax increases.
"That's an encroachment on local decision-making," said Florida League of Cities lobbyist John W. Smith. "Now, they're just meddling."
Florida Association of Counties lobbyist Sarah Bleakley said it means "complete control by Tallahassee."
They weren't sure what to make of the taxpayer choice provision.
"This change creates a dynamic that I've never seen in our tax policy before, where people get multiple choices as to what they want to pay in taxes," Smith said. "It just seems kind of odd."