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Governor proposes billions in tax cuts for property owners in Florida

Author johnbsims3
Admin Male

#1 | Posted: 31 Jan 2007 16:29 
Governor proposes billions in tax cuts for property owners in Florida

By Jason Garcia and John Kennedy
Tallahassee Bureau
Posted January 31 2007

TALLAHASSEE Gov. Charlie Crist unveiled a massive tax-cut plan Tuesday, calling on the Legislature to set a special election to give voters the final say on several of his proposals.

If legislators agree, Florida residents will decide whether to double the state's $25,000 homestead exemption and expand the Save Our Homes property-tax cap to include businesses, second homes and houses owned by out-of-state residents. The Republican governor would also allow homeowners to carry those tax-cap savings with them when they move to new homes.

Overall, Crist's proposed property tax relief would save about $2 billion in the first year for homeowners, landlords and businesses, but those savings would come from the budgets of local governments and school districts.

The savings would increase to about $4.7 billion annually in five years, according to estimates released by the governor's office.

The combined measures, Crist said, would force cities and counties to be more disciplined in how they spend taxpayers' money by slashing billions of dollars from their tax rolls.

"Local governments will now have to do the same kind of thing that families all over Florida do," he said.

A special election, which the governor said could be held in September, is no sure thing. Three-quarters of the 160-member Legislature would have to support the idea. Sixty percent of Florida voters then would have to approve the measure for it to become law.

Crist's plan to dramatically expand the Save Our Homes tax cap would eventually lead to big cuts down the road -- likely making it the most contentious element of the governor's property-tax package.

Adopted in a 1992 referendum, Save Our Homes limits the amount the taxable value of someone's primary residence can grow to 3 percent a year. The constitutional amendment applies only to homesteaded properties -- not second homes, businesses or rental properties -- and the savings are lost when a homeowner moves.

The amendment was originally designed to protect people from being forced out of their homes because of skyrocketing property values. But homeowners around the state now say that it traps them in their current houses because they could not afford the property taxes if they moved to a new home.

Crist's answer would be to make Save Our Homes "portable" -- that is, allow homeowners to keep the tax savings even when they move.

Here's one way it could work: A resident whose home has a taxable value of $100,000 but who sells it for $300,000 gets to apply the difference of $200,000 to the next home. If the new home is bought for $600,000, for instance, the resident would pay taxes as if the property were assessed at $400,000.

Mindful of the criticism from businesses that limiting taxes for homeowners simply shifts the tax burden to them, Crist would also extend the 3 percent annual tax cap to commercial and other non-homestead property.

But critics contend that Crist's plan would simply take an already unfair tax-break and make it worse.

An Orlando Sentinel series last fall, for instance, found that that singer Jimmy Buffett and talk-show host Rush Limbaugh each saved about $224,000 in property taxes last year on their Palm Beach County homes. The average Florida homeowner, by contrast, saves about $1,700.

The push to slash property taxes comes after an election in which Crist made the issue a central plank of his campaign. And it follows an extended period, from 1994 to last year, in which statewide property-tax collections have more than doubled to $25.7 billion.

But the marked increases in recent years, when home values and sales were powered by Florida's red-hot real-estate market, have cooled. Crist's plans are certain to face objections from across the state.

"We're just urging that Gov. Crist and the Legislature be cautious so we're not back here 10 years from now trying to undo what we've done," said Kristen Vallese, spokeswoman for the Florida Association of Counties.

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Governor proposes billions in tax cuts for property owners in Florida
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