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Panel puts 25
percent property tax cut on November ballot
Posted March 19, 2008
TALLAHASSEE, Fla. (AP) – March 18, 2008 – Florida voters will have a
chance in November to approve an across-the-board property tax cut
averaging 25 percent, which would dwarf two other tax relief measures
enacted over the past year.
The Legislature would be required to replace an estimated $8 billion in
annual revenue losses through several options, including a 1 percentage
point increase in the present 6 percent statewide sales tax.
The measure approved Monday by the state's tax commission would abolish
the portion of property taxes the Legislature requires local school
districts to levy in order to qualify for state aid. Other school taxes,
which represent a much smaller part of overall tax bills, would be
unaffected.
Another provision would give businesses, second homes and other
properties that do not qualify for a homestead exemption – available
only for primary homes – a 5 percent cap on annual assessment increases.
Homesteads now have a 3 percent cap and the other properties received a
10 percent limit as part of Amendment 1, which voters approved Jan. 29.
The new proposal was approved by the Taxation and Budget Reform
Commission, which meets every 20 years, and sponsored by Commissioner
John McKay, a former Florida Senate president.
It is similar in concept to a tax swap that House Speaker Marco Rubio
was unable to get through the Legislature last year. Rubio, R-West
Miami, was on hand to urge that commissioners adopt McKay's proposal.
''If you are waiting for the Florida Legislature to cut taxes, it's not
going to happen,'' Rubio said. ''You're our last hope.''
The Florida Chamber of Commerce, Associated Industries of Florida and
other business groups opposed the proposal because of the sales tax
increase and potential it would force the Legislature to tax services,
which are now excluded from sales tax.
The penny-per-dollar sales tax increase is expected to bring in from
$3.3 billion to $3.9 billion a year. That's more than $4 billion short
of the replacement goal. Other options include repealing sales tax
exemptions, cutting state spending and adding revenues resulting from
economic growth the sponsors predict the property tax cut will generate.
The commission voted 21-4 for the proposal. A minimum of 17 votes is
required to get on the ballot. The commission's drafting committee now
will put it into a ballot format before returning to the full panel for
a final vote.
Tax increases require 67 percent approval at the ballot box, but McKay
said his proposal would need only the standard 60 percent. That's
because the sales tax increase is optional, not required, he said.
Commissioner Patricia Levesque, executive director of two education
foundations created by former Gov. Jeb Bush, withdrew a nearly identical
proposal she sponsored. Commissioner Carlos Lacasa, a former state
representative from Miami, asked the commission to postpone action on a
competing plan.
Lacasa's measure features a 25 percent ''super exemption'' for all
residential properties, including second homes and rentals. He said he
wanted time to see if it could be made compatible with McKay's proposal,
which he voted for.
The Legislature last year ordered local governments to roll back
property taxes, but many avoided severe cuts by taking advantage of a
provision that let them override the requirement through votes of more
than a simple majority. Others passed new fees to make up at least some
of the lost property taxes.
Amendment 1, meanwhile, is expected to save primary homeowners about
$240 a year by doubling their $25,000 homestead exemption but only for
non-school taxes on houses valued at more than $50,000.
Other provisions will give homesteaders ''portability'' by letting them
take Save Our Homes benefits when they move, provide a business tax
break on equipment and other personal property and add the 10 percent
non-homestead assessment cap.
Together those measures are expected to cut property taxes by about $24
billion over five years _ about half as much as the commission's
proposal.
They did little, though, to address inequities caused largely by Save
Our Homes, which voters approved in 1992. It shifted tax burden from
homesteads to other types of property and new homebuyers.
The commission's amendment addresses the fairness issue by providing tax
relief to all properties while lowering the assessment cap for
non-homestead properties.
Revenue replacement options in the commission's amendment include
repealing certain exemptions ranging from stadium skyboxes to bottled
water, but it prohibits consideration of those for necessities of life
such as food, medicine and residential rents, as well as charitable and
religious purposes.
The listed options do not include services such as accounting and legal
work that now are excluded, but the measure does not prohibit lawmakers
from that alternative.
Commissioner Randy Miller, executive vice president of the Florida
Retail Association, voted against the amendment after arguing it would
force the Legislature to pass a service tax because that would be the
only way to make up the lost school revenue.
The other no votes were cast by Barney Barnett, vice president of Publix
Super Markets Inc. in Lakeland; R. Mark Bostick, president of Comcar
Industries in Winter Haven, and Greg Turbeville, a Tallahassee
consultant and former Bush policy director.
© 2008 FLORIDA
ASSOCIATION OF REALTORS
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