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Update from Dean Cannon

Author johnbsims3
Admin Male

#1 | Posted: 17 May 2007 14:54 
Dear Members:

I would like to take a few moments of your time to provide an update on where we are on property taxes.

In the final days of Regular Session, Senator Webster and I focused on one particular approach which has the potential to provide the levels of relief and reform that our members seek and which also appears to be favorably viewed by our partners in the Senate. As you may already know, Speaker Rubio recently publicly discussed this methodology upon which we hope to base a consensus product for property tax relief and reform. Under this approach, homestead exemptions would be dramatically increased based on a percentage of value (as opposed to a flat dollar amount.)

Here is one example of how this might work:

- On the home's first $300,000 in just value, 80% of the value of the property would be exempt from property taxes.
- On the next $700,000 in just value, 70% would be exempt.
- On just value above $1,000,000, 30% would be exempt.

Under the above "tiered" example, about 90% of existing homestead property owners would benefit under the plan. Furthermore, the relief is targeted proportionally to the homestead properties that have been treated most unfairly as a result of the inequities created by the Save Our Homes amendment, i.e., people who recently purchased their home will receive greater relief than those longstanding homestead owners who have been living in their homes longer and receiving the valuation protection provided by the Save Our homes amendment.

It's important to note that the above tiered structure is only one example of how the percentage based exemption methodology could be implemented. There are several variables and options to be considered, including what percentage(s) to use and to what the percentage exemption will be applied, e.g., should the exemption be based upon a flat statewide percentage, a percentage that varies county-by-county like median home value, or a percentage based upon a tiered structure similar to the one above, or some combination or variation of these approaches.

With respect to the small percentage of homeowners who may be better off under the existing Save Our Homes structure than a percentage-based exemption, our goal would be to "grandfather" their existing benefit. Although they may not receive a reduction in their current property taxes, they would no longer be trapped in their homes, unable to move. The new larger homestead exemption would allow longstanding homestead owners to move without an excessive higher tax penalty, achieving a great reduction in the inequities created by the Save Our Homes and practical portability.

We may also be able to provide relief to non-homestead property owners through this percentage-based exemption approach as well. Both non-homestead residential properties and commercial and industrial properties could be granted an exemption equal to a percentage of their value and would consequently see property tax savings in addition to those achieved through a statutory roll-back and cap.

Although relief for the taxpayers remains our goal, we should also recognize that this approach will affect local governments differently than our original rollback plan with which you are familiar. Under that plan, local governments which had significant increases in revenues which were not attributable to growth generally experienced the largest cuts. Under this new approach, jurisdictions whose property mix is heavily homestead residential may experience different levels of reductions in property tax revenues as compared to those jurisdictions whose property mix is non-homestead residential, depending ultimately on what percentages are set for the various exemptions.

Having identified conceptual common ground for the basic foundation for a plan, we still have much work to do. Among the remaining goals are providing targeted relief for the elderly poor, affordable housing, and working waterfronts. We will also need to incorporate the revenue and millage cap mechanisms and address the challenges faced by fiscally-constrained counties and cities, school districts, hospital taxing districts, and children's service councils. We are working daily on these and all the remaining issues in addition to negotiating with the Senate over what level of relief will be provided to Florida's taxpayers.

Based on agreement between the Speaker's office and Senate President's office, the joint meeting in Tallahassee scheduled for 1:00 on May 21, 2007, will be devoted entirely to a presentation and discussion of the details of the percentage-based exemption methodology and how it may be implemented. Once that foundation is laid, we will be positioned to address the remaining issues before us. For our meeting on June 4, 2007, we will address the remaining issues (such as relief for the elderly, affordable housing, working waterfronts, protections for critical special districts, etc.) which will allow us to tailor our work product and target those taxpayers who need relief the most while protecting essential government services. Over the coming weeks, I believe we will craft a plan which both chambers and both parties can support but, most importantly, that will provide meaningful property tax relief and reform for the citizens of Florida.

Thank you for your time.

Dean Cannon
State Representative
District 35
http://www.floridahomesteadservices.com

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Update from Dean Cannon
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