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Portability Won't Cure Tax Ills

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The Tampa Tribune

Published: February 10, 2008

Amendment One, the package of tax cuts voters added to the state constitution last month, was oversold.

Gov. Charlie Crist says that by voting yes, homeowners have freed themselves from the trap created by the Save Our Homes cap on property values. But it's not that simple, at least not yet.

Some homeowners say they will ask a court to declare the portability feature unconstitutional. A legal resolution could take years. That means if you transfer your tax savings from your old home to a new one, there's no guarantee you'll get to keep the tax savings you expect.

That uncertainty will give pause to anyone wanting to move. An additional obstacle is the current oversupply of homes for sale. But even when the market recovers, inordinately high taxes for new buyers will remain an obstacle.

The tax cuts were hastily thrown together because they polled well, not because they represented balanced, rational reform. They even give homeowners the perverse incentive to argue that the tax assessor appraised their property too low, because the higher the assessed value, the greater the tax cap available when they sell their home.

Many urban residents understand the imperfections of the portability issue, which is one reason voters in Tampa, Orlando, Jacksonville and Tallahassee gave it insufficient support to pass.

It was wildly popular in South Florida, though, and so won the necessary 60 percent approval statewide. It did not pass in Hillsborough and 33 other counties.

Among voter concerns is the possibility local governments now will raise tax rates, which would further hurt new buyers and owners of commercial property who are overtaxed and who will see scant relief under Amendment One.

As for the constitutionality of portability, the governor says not to worry. But taxpayers are right to be concerned. Here is the sort of unfairness a court will review:

Consider an actual Tampa home with a market value of $387,252 and an assessed value limited by the Save Our Homes cap to just $46,658. That homeowner can now fill out form DR-501T and move this tax savings anywhere in the state. The cap guarantees his family a near tax-free existence - less than $500 a year - as long as they buy a home of similar value.

How can it be constitutional that wherever this family might relocate, it can expect to be supported by neighbors who are likely paying taxes of $5,000 or more a year for homes of similar value?

Another side of the same inequity is how the new law gives little or nothing to an owner whose property has not soared in value. That owner would have very little shelter to transfer, and if he moves could end up paying 10 times the taxes as the owner able to move a big tax shelter to an identical house.

It is hard to see how such outcomes can be defined as equal protection under the law.

Crist needs to remember that it was George Orwell, not Thomas Jefferson, who wrote, "All animals are equal, but some animals are more equal than others."

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