Future property tax cuts could be awhile in the = making - 01/31/2008

Posted on = Thu, Jan. 31,=20 2008

Future property tax cuts could be awhile = in the=20 making

By MARY ELLEN KLAS AND GARY = FINEOUT

Florida voters sent a loud message = Tuesday that=20 they want lower property taxes, but will the new = constitutional=20 amendment mean reductions on their next tax bill? Are more = tax cuts=20 likely?

The answer to both questions is simple: It depends.

The immediate winners of Amendment 1, approved by voters = by a 2-1=20 ratio, will be longtime homeowners who moved last year or = plan to=20 move now, existing homeowners, businesses that pay taxes on = tangible=20 personal property, and owners of commercial property, rental = units=20 or second homes whose values have gone up more than 10 = percent in=20 the past year.

For the first time since voters approved the Save Our = Homes tax=20 limitations in 1992, homeowners can transfer the tax savings = they=20 have accrued when they move.

MARCH DEADLINE

To get the added tax break, those who move must fill out = a simple=20 form from their county property appraiser by March of each = year. The=20 appraiser will then calculate the savings based on the = market value=20 of the new home and the assessed value of the old home and = apply it=20 to the next tax bill.

Anyone who receives a homestead exemption is eligible to = get an=20 increased exemption on this fall's tax bill. That equates to = about=20 $15,750 in Miami-Dade and $16,000 in Broward and amounts to = an=20 average savings of about $240 per home statewide.

Not everyone in the state will get the added exemption. = It=20 doesn't apply to homeowners in mostly rural areas whose = property is=20 assessed at between $50,000 and $75,000.

And there's nothing to stop cities and counties from = adjusting=20 their tax rates to recover some of the lost revenue.

''We're certainly going to see some [rate] increases,'' = predicted=20 Kurt Wenner, director of tax research for Florida TaxWatch. = And=20 because the assessment increase on homeowners is limited to = 3=20 percent a year, the burden will be increased on nonhomestead = property if rates rise, he said.

NONHOMESTEAD

Owners of nonhomestead property, such as second homes, = rental=20 property or commercial buildings, will get a tax break too = -- but=20 only if their assessment would have climbed more than 10 = percent=20 this year. The new amendment limits the increase on their = tax=20 assessment to 10 percent.

CRIST'S RESPONSE

Gov. Charlie Crist campaigned on the promise that this is = the=20 first step in a prolonged push for additional tax cuts, but = the=20 prospect of additional tax breaks appears less certain.

''I know that there is a thirst and hunger to cut = property taxes=20 additionally, particularly as it relates to business,'' = Crist said=20 Wednesday. ``I share that interest.''

But before he pursues more tax cuts, he said he wants to = consult=20 with business leaders to find the smartest approach.

Legislative leaders said this week they are reluctant to = take up=20 the issue in the upcoming session as they struggle with = finding $2=20 billion to cut from the state budget. And the chairman of = the=20 constitutional tax commission, which meets every 20 years = and is=20 meeting this year, said on Wednesday that the panel won't = fiddle=20 with the Save Our Homes exemption now that voters have = spoken.

''I'm not implying we're done with property-tax reform by = any=20 means,'' Allan Bense, chairman of the Taxation and Budget = Reform=20 Commission, said at its meeting on Wednesday. But he said = the=20 amendment ''helped clear the deck'' and took portability and = doubling the homestead exemption ``off our plate.''

The commission has the power to put any tax-reform = amendments=20 directly on the November ballot.

Bense said the commission would not propose any changes = to Save=20 Our Homes because despite concerns from newcomers to Florida = and=20 first-time home buyers about the ''unfairness'' of the = system,=20 voters would never approve getting rid of it.

FAIRNESS ISSUE

Other members of the panel, however, said they want to = work on=20 making the system more fair. By giving longtime homeowners = the=20 lion's share of the benefits of portability, several argued, = the=20 amendment makes an already inequitable system more unfair = and=20 vulnerable to a constitutional challenge.

''I'm very much worried,'' said Commissioner Talbot = ''Sandy''=20 D'Alemberte, president emeritus of Florida State University = and=20 former American Bar Association president. ''We don't have = tax=20 reform with'' Amendment 1, he added.

The panel is already considering a property-tax reform = plan=20 proposed by Commissioner John McKay, a former Florida Senate = president from Bradenton. McKay's plan would repeal the = property=20 taxes that now pay for schools, reducing the tax bill for = all=20 taxpayers by about 40 percent, and replace that money by = expanding=20 the state's sales tax to include many services that are now = exempt=20 from=20 = taxes.