by Daily Business Review on May 4, 2011
The Florida Senate narrowly approved tax breaks for a wide range of property owners, but some who voted for the ballot proposal Wednesday said they'd try to replace it with a more equitable version before voters get their say next year.
The House, meanwhile, put a narrower tax-cutting state constitutional amendment on the November 2012 ballot. It would expand a property tax break for combat-disabled veterans.
Unless lawmakers replace the comprehensive tax proposal (SJR 381), it also will go on the ballot next year as a result of the Republican-controlled Senate's vote.
It passed 25-12 — one more vote than the minimum needed — on a largely partisan roll call. All but three Republicans voted for it. All but one Democrat opposed it. The House, also with a GOP majority, previously passed the proposal.
Sen. David Simmons, R-Maitland, said he voted for it despite "grave reservations."
"We are compounding the inequity that exists in our tax laws," Simmons said. "And the first rule of taxation is that you must have a rational and equitable basis for doing the taxation, and we don't have that."
The Senate sponsor, Sen. Mike Fasano, had so such qualms. The New Port Richey Republican argued the tax breaks would stimulate Florida's moribund economy.
"It will encourage people to buy homes," Fasano said. "It will encourage people to invest and open a business again and create jobs."
The amendment has elements benefiting primary homeowners, also known as homesteaders, as well as businesses and other non-homestead properties.
Besides lower taxes for most property owners, it aims to fix inequities caused by the Save Our Homes Amendment, which went into effect in the 1990s, but Simmons and others said those cures would just cause more disparities.
Save Our Homes caps annual assessment increases for homesteads at 3 percent no matter how much property values go up.
That has meant a more recently purchased home is taxed more than one valued the same but with many years of Save Our Homes benefits. The homestead cap also has resulted in higher taxes for non-homestead properties including second homes.
In an attempt to remedy, voters adopted another amendment in 2008 that gaves non-homestead properties a 10 percent annual assessment cap. It has seldom come into play because most property values have fallen since then.
The amendment sponsored by Fasano and Rep. Chris Dorworth, R-Lake Mary, would make the cap more effective by reducing it to 5 percent.
Simmons argued that would create more inequities between new and old businesses, just like those Save Our Homes caused for homesteads.
The Dorworth-Fasano amendment also would give a bigger exemption to first-time home buyers. It actually, though, would apply to anyone who hasn't owned a home for at least three years.
Simmons said next year he will push for a replacement amendment with a 7 percent cap for non-homestead properties while replacing the first-time homeowner provision with bigger exemptions for all homesteads valued up to $400,000. He said that alternative is supported by the Florida Association of Counties and Florida League of Cities.
Another provision of the Dorworth-Fasano proposal would allow the Legislature to repeal a quirk in the Save Our Homes Amendment known as the "recapture clause." It allows a home's assessment to rise up to 3 percent annual if its value declines.
Sen. Don Gaetz, R-Niceville, called the recapture rule "unjust, inane, inappropriate, unexplainable, unjustifiable."
Sen. Charles Dean, R-Inverness, joined Simmons in voting for the amendment but had reservations for another reason. Dean is worried about its effect it on rural counties that are struggling because of low property values.
"For three of those counties or maybe four this is a great bill," Dean said. "The rest of them, it's a killer."
Sen. Steve Oelrich, R-Gainesville, also was worried about what it would do to rural counties in his district.
"They're boiling bones right now trying to keep their heads above water," Oelrich said before voting against the amendment.
Other Republicans who crossed party lines were Sens. Nancy Detert of Venice and Paula Dockery of Lakeland. The only Democrat voting for the amendment was Maria Sachs of Boca Raton.
The veterans amendment (SJR 592) passed unanimously. Currently, only combat-disabled veterans who lived in Florida before enlisting can get the exemption. The amendment would lift that restriction.
