Legal Clips, [January 2008]Florida voters have given their resounding approval to a constitutional amendment that overhauls the state's property tax laws and saves the average homeowner $240 a year. The lopsided "yes" vote was a clear sign that voters were more concerned about cutting their taxes, or being able to move and retain their tax advantages as Florida residents, than any loss in government services that might result. Years of mushrooming property assessments—and the higher taxes that resulted—led homeowners across Florida to clamor for relief. On the campaign trail in 2006, Governor Charlie Crist promised to fight to double the state's $25,000 homestead exemption. Amendment 1 does that for all levies except school taxes, and also empowers Florida residents to carry up to $500,000 in Save Our Homes tax benefits with them if they buy a new house or apartment to live in. A lawsuit has already been filed to stop the amendment from being implemented.
State economists have estimated that the tax breaks will cost local governments $9.3 billion in lost revenue over the next five years and public schools, $1.3 billion. In Broward, schools will lose $145 million and other local governments, $943 million. Broward School Board Chairwoman Robin Bartleman said schools can't take any more cuts. Florida already ranks near the bottom nationally for education funding, "and that is a sin," she said. Even though many thought the savings for homeowners would be minimal, they viewed it as the first step in a bigger plan to provide tax relief. House Speaker Marco Rubio, R-Miami, felt from the beginning that it did not go far enough and threw his political muscle behind another plan to cap all property taxes at 1.35 percent of assessed value. Rubio has hinted that he may try to get the Legislature to vote this spring to put that issue on the November ballot. But Senate Democrat Leader Steve Geller of Cooper City said the Senate would have little appetite to tackle tax reform again. Still waiting in the wings is the Florida Taxation and Budget Reform Commission, which is currently considering 34 proposals. The commission has until May 4 to decide what it wants to put on the November ballot.
South Florida Sun-Sentinel, 1/30/08, By Linda Kleindienst
[Editor’s Note: Amendment 1 is further explained in the Q&A below from the Orlando Sentinel, which notes that Gov. Crist has said “he wants to spend $1 billion more on schools next year” but that “[o]ther lawmakers acknowledged it will be tough to ‘hold schools harmless.’’’ For more on Amendment 1 and position statements on this and other proposals for property tax relief, see the issue brief by the Florida School Boards Association (FSBA). The June 2007 report by the Center on Budget and Policy Priorities at the last link provides information on property tax caps across the country, such as that suggested by Mr. Rubio. The report asserts that the problems with these measures include that: (1) they do nothing to change the rising costs localities face, (2) over time they frequently never are offset by the promised increases in state aid, and (3) they may exacerbate inequities. The report suggests that homestead exemptions and circuit breaker programs are a better way to provide property tax relief without undermining the fiscal vitality of local governments, as long as these measures are adequately financed by the state.]
Orlando Sentinel, 1/20/08, by Aaron Deslatte
FSBA issue brief on property tax relief
Center on Budget and Policy Priorities report