Tax Cut Would Be State's Largest

By JEROME R. STOCKFISCH and ANTHONY McCARTNEY The Tampa Tribune

Published: Jun 9, 2007

TALLAHASSEE - House and Senate negotiators reached agreement late Friday on a property tax cut package projected to save taxpayers $31.6 billion over the next five years.

Legislative leaders called it the largest tax cut in Florida history, with an average savings for a homestead property of $1,300 in 2008-09 - a 44 percent reduction in property taxes.

Under the proposal, plans for new libraries, fire stations and parks in Hillsborough County would be scrapped, but other cuts, such as to ambulance service and the sheriff's office, might be spared.

The plan will be brought to a key joint committee Monday and the full Legislature when the special session convenes on Tuesday.

The plan would require local governments to maintain revenue collections next year at existing levels, then institute a cutback of anywhere from 3 to 9 percent depending on how profligate their spending has been over the past five years. And lawmakers propose a constitutional amendment asking voters to approve a super-homestead exemption that would reduce the taxable value of most homes to 25 percent of their just value. The amendment must pass with 60 percent of the vote.

The Legislature intends to exempt school districts from the cutbacks, a letter from Senate President Ken Pruitt and House Speaker Marco Rubio said. Presumably, that means lawmakers will have to come up with nearly $2 billion a year in additional state school funds.

Gov. Charlie Crist applauded the pact and said he looked forward to "a promising and productive special session."

The deal appears to satisfy conservative House leaders who staunchly insisted on "meaningful" property tax cuts. House Republicans originally forwarded a plan that would have cut taxes statewide by anywhere from $30 to $40 billion over five years; Senate and Democratic proposals were softer on local governments.

The legislation would:

• Hold taxes at current levels, then require an additional cut depending on a local government's taxing performance over the past five years. Pasco's cut would be 3 percent; Hillsborough's, 5 percent; and Pinellas', 7 percent.

The cities of Tampa and St. Petersburg would both face 5 percent cuts. St. Leo, New Port Richey and Temple Terrace would not have to cut deeper than the rollback rate because of their thrifty ways compared to average municipal tax increases around the state. Lakeland, Brooksville, Largo and many of the Pinellas beach communities will pay for heftier tax increases with a 9 percent cut on top of the rollback.

•Require special taxing districts, such as water and transit boards, to make the same rollback and an additional cut of 3 percent.

•Cap future property tax revenues based on personal income growth and new construction.

•Allow local governments to override the cutbacks and cap, but it could require a supermajority or unanimous vote or a referendum.

The constitutional amendment would:

•Provide a "super exemption" in lieu of the current homestead exemption and "Save Our Homes" protection. It would exempt 75 percent of the first $200,000 in value of a home, and another 15 percent for the next $300,000. Those whose existing "Save Our Homes" benefit provides a greater savings would be allowed to keep it.

•Continue existing exemptions for disabled veterans, low-income seniors and agricultural land.

•Provide a $25,000 tangible personal property tax exemption for small businesses.

Nonhomestead properties would benefit from the rollback and future caps on revenue increases, but the plan excludes second homes from any super exemption.

The agreement was released after business hours Friday and cities and counties were scrambling to analyze the impact. In a statement, the Florida Association of Counties said it was "heartened by the shift in this final plan, which seems to give a greater degree of respect" to local government. Earlier proposals called for much steeper rollback rates, some to the level of 2000-2001.

The 5 percent reduction for Hillsborough County would mean a loss of $40 million, but county Budget Director Eric Johnson said the cuts likely would be much deeper.

Detailed calculations of the impact will be made next week, he said. But county officials had been planning on about $75 million in new growth, so the actual cut in Hillsborough's budget would be closer to $115 million next year. He said the money was earmarked for building new libraries, fire stations and parks.

Those projects would be among the first things to be eliminated under a budget cut plan unveiled by County Administrator Pat Bean last week. Affordable housing programs, code enforcement officers, economic development incentives, senior center and parks staffs also likely would be cut if the budget reduction plan was followed.

The county would be spared the deepest level of cuts - for at least a year. Bean estimated that if the county lost up to $217 million, animal adoption programs would be reduced, advanced care ambulance service at six Fire Rescue stations would be eliminated, and part of the sheriff's office budget would have to be trimmed.

"That's just the first hit," Johnson said. If voters approve the second part of the Legislature's plan, Hillsborough could lose millions of dollars more and some of the programs spared this year might face cuts.

"That's the second punch," he said.

Reporter Jerome R. Stockfisch can be reached at jstockfisch@tampatrib.com or (850) 222-8382. Reporter Anthony McCartney can be reached at (813) 259-7616 or amccartney@tampatrib.com.

THE PLAN

Homeowners on average would save $4,517 during the first five years.

Now: Governments roll back to 2006-07 revenue, with additional cuts of 5% in Hillsborough, 7% in Pinellas, 3% in Pasco and 5% in Tampa and Plant City.

January: Voters are asked to increase the $25,000 homestead exemption to:

•75 percent of the first $200,000 in value, with a minimum exemption of $50,000.

•15 percent of the next $300,000 in value.

•For 27% statewide, Save Our Homes savings are greater and would be used.