Property Tax Reform May Offer A Little Mad Money For Hillsborough Residents

By JEROME R. STOCKFISCH The Tampa Tribune

Published: Aug 1, 2007

TALLAHASSEE - Got big plans for all that money you're going to save on your property taxes this year?

You might want to scale them back.

After the Legislature took aim at local property taxes in a special session this year, a look at some sample homes of average and above-average value in Hillsborough County suggests your bill might be $50 to $80 lighter.

The savings are more impressive when compared with what could have been a 2.5 percent increase in taxes on homestead properties this year - $100 to $200 difference - but the numbers thrown around by state lawmakers bent on slashing property taxes seem a little optimistic.

"Generally, people are going to be disappointed in the small tax savings they're going to get," County Administrator Pat Bean said.

The Hillsborough County Property Appraiser's Office is compiling tax rates from the county's various taxing districts. Overall, analysts predict about a 2 percent drop from last year's tax bill to this year's in the unincorporated county.

"That's pretty amazing," said David McKalip, founder of the citizens group Cut Taxes Now, when told of the Hillsborough numbers. "If people expect Tallahassee to fix this problem, they better think again. This bill was crafted based on the politics of being re-elected."

Tax rates vary from county to county and city to city, and even within cities. The rollbacks mandated by the Legislature also vary. The Tampa Tribune looked solely at unincorporated Hillsborough County for a handful of unofficial estimates.

The Bedeviling Arithmetic

So how does a freeze in tax rates and a mandated rollback of 5 percent in Hillsborough's case amount to a $48 break for a Hillsborough home worth $185,469, virtually right on the county median market value of $185,470.

First, Hillsborough appraisers say homestead properties will rise in value by about 2.5 percent this year. Since lawmakers ordered local governments to address their tax rates, not their valuation of property, that figure stands.

A 5 percent rollback in rates - after a 2.5 percent increase in value - means an overall decline in taxes of 2.5 percent.

But it gets complicated. School taxes, which make up a big chunk of local property taxes, are exempt from the mandated rollback. So for the sake of simplicity, Hillsborough appraisers say the decline will be more like 2 percent.

Now comes the math. That $185,469 house - an actual example pulled from county property appraiser records - has enjoyed a generous Save Our Homes benefit, with any increase in its assessed value capped at 3 percent a year. This year, its assessed value is $139,466.

The house also gets the standard homestead exemption of $25,000 and even a widow's exemption of $500. So its taxable value is $113,966. Last year's bill was $2,379.

A 2 percent decline on that bill would bring it to $2,331. That's down $48 year-to-year.

Savings Boasts Don't Match Up

A bottom-line comparison like that misses the point of the changes enacted by the Legislature, said Sen. Mike Haridopolos, R-Indialantic, one of the architects of the legislation.

"From Day One I was concerned about the expectations game," Haridopolos said.

A key provision of the new tax law, he said, limits future local government revenue growth to the growth in personal income, which means no more spikes in tax collections and tax bills in tandem with rising property values.

"My number one goal was to finally put government on a diet," Haridopolos said. "Not only do they have to make this adjustment in the total dollar amount, but with the law that passed, government revenue will not grow faster than family income."

The year-to-year savings is a "bonus on top of it," he said.

In June's session, lawmakers boasted that the average homeowner's tax bill would drop by $174 under the plan. That doesn't appear to be the case, at least in Hillsborough County.

The tax numbers come after lawmakers promised significant savings on homeowners' insurance bills, another issue they tackled in a special session. Lower rates aren't surfacing for many, and consumers are expressing their outrage.

The din could grow once taxpayers receive their "Truth In Millage," or TRIM notices, starting this month. That is the official notice from the appraiser to the homeowner of what analysts expect the 2007 tax bill to be.

"We have a feeling those calls are going to come," said Warren Weathers, chief deputy property appraiser for Hillsborough.

There's a parallel between homeowners' expectations on the property insurance and property tax issues, Weathers said. "Unfortunately, the tax part comes after the insurance part, so it's insult to injury. The only good news in the whole picture is, both of these issues are still being worked on."

The county is still ironing out its budget, but a spending plan proposed July 23 by Bean, the county administrator, reflects a $56 million decrease. The budget cuts spending on fire stations, libraries and parks and slashes 480 positions, including 137 current full-time employee layoffs.

"People thought we were going to get a $2,000 tax break and we were going to build fire stations and libraries and sidewalks," county Commissioner Mark Sharpe said. "It's impossible."

More cuts could come if voters approve the proposed "superexemption" in a constitutional amendment on the Jan. 29 ballot. But there are so many variables in that scenario, analysts are having trouble gauging its impact on property taxes should it pass.

Most notably, it would allow homeowners to keep their existing Save Our Homes protections if they chose.

In any case, taxpayers such as McKalip of Cut Taxes Now aren't satisfied, even by the prospect of a superexemption. His group plans a citizens initiative to provide greater tax savings.

When TRIM notices start arriving at homes, "I think people will recognize the political process in Tallahassee for the sham that it is," he said. "People will recognize the need to take action."

Reporter Anthony McCartney contributed to this report. Reporter Jerome R. Stockfisch can be reached at (850) 222-8382 or jstockfisch@tampatrib.com.

A SECOND CHANCE AT SAVINGS

There are two parts to the Legislature's property tax plan:

Part 1: Enacted by the Legislature

•Limits local governments to collecting no more in tax revenue than it collected this year.

•Requires local governments to cut even more, 3 percent to 9 percent, based on a local government's tax performance from previous years.

Part 2: This proposal goes to voters on Jan. 29

•Create a "super" homestead exemption that would decrease a property's taxable value and, as a result, affect property taxes. Here's how it would be calculated:

- Deducts 75 percent of the first $200,000 of a home's value

- Deducts 15 percent of the next $300,000 of a home's value

Example:

A $200,000 home would have $150,000 deducted. Taxable value: $50,000

A $400,000 home would have $180,000 deducted. Taxable value: $220,000

•Allows homeowners to keep their Save Our Homes cap and $25,000 homestead exemption until they move or die.

If voters approve the measure, local governments would have to make more budget cuts to make up for lower property tax revenue.