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Highlands Today

Voters To Decide Tax Cut Proposal

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By Gary Pinnell | Highlands Today

Published: October 31, 2007

SEBRING — In 2005, when Gilbert Santavenere moved to Sebring from Connecticut, the taxes on his house were $2,200 a year.
Since the previous owner had a homestead exemption, Santavenere expected the taxes to go up to $2,800.

"It ended up being $3,500 a year," Santavenere said.
In a nutshell, that's the problem with Florida's property tax system, something the Florida Legislature tried to correct Monday when it passed a constitutional amendment that will lower ad valorem taxes an average of $240 per homeowner.

Voters can grant final approval of the bill on Jan. 29, at the same time they cast ballots in the presidential primary. The measure includes variations of two planks in Gov. Charlie Crist's campaign platform last year: doubling the $25,000 exemption for homeowners and letting them take the 3 percent Save Our Homes cap when they move.

A Tussle

The House reluctantly passed a take-it-or-leave-it compromise the Senate offered Monday.
"They were caught in a squeeze play," said Highlands County Property Appraiser Raymond McIntyre, who was in Tallahassee last week and watched the Monday proceedings on TV. After the senators left the Capitol, the House could either pass the Senate version, or go home and admit to voters that there would be no tax reform this year. Some argued for the latter, but they couldn't convince their colleagues.

So Florida voters will have a leaner, simpler property tax relief plan to approve when they go to the polls Jan. 29.
The Senate passed its new plan 35-4. Senate President Ken Pruitt, R-Port St. Lucie, announced he had no intention of considering any changes by the House. Representatives voted 97-18 for the amendment.

"It's deal, or no deal," said Rep. Kevin Ambler, R-Lutz. "I think we owe it to our constituents to take the deal."
"Don't apologize for what you are passing," said House Speaker Marco Rubio, R-West Miami, "We did our best."

The new plan is expected to cost cities, counties, special districts and school boards $8.74 billion in the first four years. That's about $1 billion less than previous proposals in both chambers although they differed significantly on the details.

It eliminated tax breaks to first-time home buyers, low-income seniors and working waterfronts. Polling shows doubling the existing $25,000 homestead exemption was the most popular of the major tax-cutting ideas the Legislature has been considering.

The compromise would double the exemption for homes valued at more than $50,000. Only 6 percent of Florida's homesteads will not qualify for the added exemption, said Senate Finance and Tax Chairman Mike Haridopolos, R-Indialantic.

Save Our Homes now limits annual assessment increases to 3 percent for homesteaders. The bill passed Monday will provide a 10 percent cap for non-homestead properties, except for school taxes.
Senate staffers have estimated the bill will cost schools $1.86 billion in the first four years. Haridopolos argued the portability provision would stimulate a depressed housing market enough to offset the school losses.

Local Effect

"I don't know how much it will cost us," said Mike Averyt, director of business and operations for the Highlands County School Board. He's waiting for an estimate from the state, which will come in about a week.

South Florida Community College will not lose any money, said President Norm Stephens. "We're not funded by property taxes."

McIntyre estimated Avon Park will lose $152,240, Sebring $199,757, Lake Placid $25,767, and Highlands County about $4.5 million. However, those numbers do not include the effect of a $25,000 exemption on personal property taxes for businesses.

He's uncertain how to estimate the effect of Save Our Homes portability, because it will allow people to upsize or downsize within Highlands County, or move here from the coasts.

Ireland Sanders, the broker/owner of Prudential Sanders Realty, also can't predict the effect of portability. But, he said, "It's one of the big things stopping people from downsizing or upgrading."
What would have helped more, Sanders said, is if the county and cities had cut back their expenditures to 2001-02 levels.

"The easiest way to solve the problem was just to lower the millage rate," he said.

"Let's see, what are they doing to me?" asked C.B. Shirey, city manager of Avon Park. "Doubling the homestead, portability, and a 10 percent cap on all other properties. What I think is that they are really restricting the local government's ability to provide services to the citizens."

Avon Park has a $9 million total budget, but the $152,000 it will lose is a hit to the general fund, which pays for a police department that costs $2.5 million, parks and recreation, streets and half of the fire department's budget.

Shirey's not happy with the bill, which he said was the Legislature's response to spiraling taxes on the coast. Instead of solving the real problem, senators and representative tarred every government with the same brush, he said.

"We're not the freewheeling spenders that the legislature and the governor paints us to be," Shirey said.

The Associated Press contributed to this report.

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