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Setbacks Plague Property Tax Reform

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By JEROME R. STOCKFISCH and CATHERINE DOLINSKI, The Tampa Tribune

Published: October 22, 2007

TALLAHASSEE - State lawmakers return to Tallahassee today to continue the special session on property tax reform. Last week, instead of nearing a consensus, the House and Senate grew even further apart, with House members overhauling their plan on Friday.

Optimists like Gov. Charlie Crist say all's still going well. But there are roadblocks to a deal now, with lawmakers staring down an Oct. 29 deadline to put something on the January ballot.

Legislative leaders and Crist had a tentative agreement on property tax reform: Double the homestead exemption, make the Save Our Homes benefit portable, and give first-time homebuyers a valuation discount.

That framework is out the window as lawmakers return to the Capitol this week. The House and Senate must pass identical bills, but will start today with competing legislation. Even within the chambers, there is displeasure with aspects of the proposals.

State Senate Democrats

They are outnumbered 26-14, but with a little help, Democrats in the upper chamber could jeopardize the 24 votes needed to pass any compromise with the House - and have threatened to do just that. By themselves, they could prevent the 30 votes needed to put an amendment on the January ballot.

The problem: Democrats strongly object to the negative impact that the Senate plan would have on schools: $1.5 billion over four years. Senate Republicans have spoken out about the cut to school tax revenue as well.

Newly revamped, the House version would take $964 million from schools over four years - down from an initial $2 billion hit. But that plan relies on new proposals that Senate leaders may not accept.

Said Minority Leader Steven Geller, D-Cooper City, to Senate President Ken Pruitt, R-Port St. Lucie: 'There's not a lot you need to do with this bill to get us to vote for it. But there are some things you need to do. When it comes back from negotiations with the House, if it still has a big fiscal impact on education, I don't think you'll get any Democratic votes, Mr. President.'

Representatives Of Rural Counties

Sens. JD Alexander, R-Winter Haven, and Charlie Dean, R-Inverness, both of whom represent rural areas, tried to amend the package to compensate fiscally constrained counties. Alexander voted against the Senate plan, while Dean voted for it.

The problem: Without the tax base of heavily populated areas, fiscally constrained counties already struggle to raise enough revenue to provide basic services. Providing a greater homestead exemption and the other tax cutting strategies would exacerbate that problem.

Said Alexander: 'If we move forward with this as a product of the Senate, it is not something I can support. Because it harms the small counties and cities that I represent.'

South Florida Republicans

With Senate Democrats threatening to block the legislation, leaders of the upper chamber need every vote they can get. But a GOP faction from South Florida is threatening to vote no if the Senate doesn't rework a tax break for low-income seniors. Miami Sens. Alex Villalobos and Alex Diaz de la Portilla, plus Rudy Garcia of Hialeah, all voted against the Senate bill last week.

The problem: The House and Senate began with a plan to exempt low-income seniors from paying any property taxes on their homes. But that would cut taxes that pay for public education, pushing the negative effect on schools to $2 billion over four years. Senate leaders tried to cushion the blow by scaling back the seniors' exemption to the first $100,000 of assessed home value. That incensed Republicans representing high-priced South Florida counties, whose constituents would benefit far less from a $100,000 exemption.

Said Villalobos, R-Miami: 'They're going to penalize seniors in Dade County because their property value is worth more than that of a senior who makes the same amount of money, someplace else. And that's just not fair.'

The Florida House

House leaders thumbed their nose last week at the original agreement with the Senate and Gov. Charlie Crist. On Thursday, House Speaker Marco Rubio declared that House Democrats had proposed several promising concepts, which appeared in the revamped tax plan that he released Friday.

The latest House proposal: Drop the doubled homestead exemption and guarantee all owners of homesteaded property an exemption equal to 40 percent of the median home value in their county. The plan gives low-income seniors an exemption equal to 100 percent of their county's median home value, and caps annual rises in nonhomestead property assessments at 5 percent. Senate leaders have rejected the nonhomestead assessment cap so far this session.

The problem: The House consensus that Rubio is forging could derail a final agreement with the Senate. It also threatens to alienate Crist, who campaigned on the doubled homestead exemption. Senate leaders are complaining that Rubio has reneged on the original plan; Crist complimented the House's initiative on Thursday but indicated that he still backed the Senate position.

Another possible problem: Republican Rep. David Simmons of Maitland likes the percentage-based exemption but opposes tying it to median home value. That, he said, would create unhealthy disparities between contiguous counties with contrasting home values. Simmons, who threw a wrench earlier this month into House-Senate negotiations over no-fault auto insurance reform, has an armload of amendments to propose when the House reconvenes on Monday.

Said Sen. Jim King, R-Jacksonville, former chamber president: 'The old political protocol is you never come into a special session until you know what the endgame is. So many times, when you don't do that, bad things happen. We had an agreement, and it wasn't lived up to.'

Reporters Jerome Stockfisch and Catherine Dolinski can be reached at (850) 222-8382, jstockfisch@ tampatrib.com or cdolinski@tampatrib.com.

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