House OKs proposal on property tax reform

Published: Saturday, April 1, 2006 at 6:01 a.m.
Last Modified: Friday, March 31, 2006 at 10:40 p.m.
A proposed state constitutional amendment that would give a new property tax break to homeowners but limit an old one was narrowly approved by a House committee Friday, but the sponsors conceded it is far from a finished product.
The Finance & Tax Committee voted 5-3 for the proposal that in part would increase the homestead exemption from $25,000 to $50,000 over 10 years.
Only owners who live in their homes can get the exemption. Second homes and rental properties are excluded. With the existing exemption the owner of a $200,000 house pays property tax on only $175,000 of that value. That would drop by $2,500 in each of the next 10 years if the amendment is passed.
Another provision would revise the Save Our Homes Amendment, added to the Florida Constitution in 1992. It now limits tax increases on homestead property to 3 percent annually or the growth in the Consumer Price Index, whichever is lower.
Save Our Homes has been a boon to many people who have seen their home values climb in recent years while their tax bills have remained relatively low, but other taxpayers must make up the difference.
"Save Our Homes has removed all fairness from property taxation," said Finance & Tax Committee Chairman Fred Brummer, R-Apopka. He said it has shifted a substantial burden from "the super wealthy to the very wealthy, from the very wealthy to the wealthy, from the wealthy to the not-so-wealthy and on down."
The proposed amendment would limit Save Our Homes benefits after Jan. 1, 2007, to $100,000. Any increase in value beyond that limit would not be covered by the Save Our Homes limits.
Rapidly increasing property values have had another consequence.
Many homeowners feel trapped because they would lose their Save Our Homes benefits if they moved.
Brummer's proposal would let them take up to $100,000 of their Save Our Homes benefit with them if they move to another house in the same county, a concept known as "portability."
Rep. Carl Domino, R-Jupiter, opposed both $100,000 limits and voted against the bill.
"I strongly reject a philosophical underpinning that talks about class warfare, talks about the rich getting too many benefits," Domino said. "It's the wealthy that pay those taxes and they pay them in large numbers."
The only two Democrats present, Reps. Ken Gottlieb of Miramar and Terry Fields of Jacksonville, cast the other dissenting votes.
Gottlieb argued property tax should be considered as part of a comprehensive examination of the entire state tax structure.
That's going to happen next year when a new Taxation and Budget Reform Commission, periodically required by the Florida Constitution, begins its work. Brummer said beleaguered taxpayers cannot wait.
The committee later changed another proposed amendment (HJR 353) sponsored by Rep. Carlos Lopez-Cantera, R-Miami, so that it is identical to Brummer's draft before approving it.
Lopez-Cantera's proposal originally included only the homestead exemption increase. It next goes to the House Fiscal Council where the debate will continue.
Brummer and Lopez-Cantera said they are open to changes. Brummer said he also planned next week to seek support in the Senate, where no similar legislation has been filed.
Gov. Jeb Bush said he'd have to take a look at the proposal before offering an opinion.
"Given the extraordinary increase in (property tax) assessments over the least three or four years this is worth looking at," Bush said.
If the proposed amendment receives a three-fifths vote in the House and the Senate it would go on the Nov. 7 ballot for approval by voters.

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