Senate to unveil tax plan

Local governments will be targeted for spending cuts, and Save Our Homes may become portable.

By ALEX LEARY
Published April 12, 2007

TALLAHASSEE - After weeks of mystery, the Florida Senate will unveil a property tax plan today that would roll back and cap local government budgets and may allow people carry the Save Our Homes benefit to new dwellings.

The long-awaited Senate plan is significant for a number of reasons:

Unlike the House plan, it will have bipartisan support. It likely will be a lesser financial hit on cities and counties, who are apt to support it as an alternative to the House plan.

The question is how the House will react - with just 12 days left in the 60-day session.

"We've left ourselves with plenty of time to get this thing done if we're willing to cooperate with one another," said Sen. Mike Haridopolos, R-Melbourne, who will be one of the chief negotiators with the House.

The Senate plan will put a significant pinch on local government by rolling back budgets and capping budget growth based on inflation.

But senators may roll back only a few years, not to 2001 as House Republicans want. There also may be a one-year freeze on any increase at all before the cap kicks in.

"There were three years of spikes, and we don't want it to happen again," Sen. Dan Webster said.

John Wayne Smith, a lobbyist for Florida's 412 cities, said the less draconian Senate rollback "would make a huge difference." But local governments would still face millions, if not more, in collective cuts. No figures were available Wednesday.

Senators went to great lengths to keep the plan under wraps until today, saying major components, such as Save Our Homes portability, were still evolving. The idea is to announce the plan this afternoon and follow with an intensive workshop on Friday.

Under Save Our Homes, annual property assessments cannot increase by more than 3 percent. Gov. Charlie Crist earlier this year said he wants homeowners to be able to carry that protection to a new home.

Many complain Save Our Homes has worked too well, keeping them from going to a larger or even smaller place because taxes would skyrocket. But altering Save Our Homes would require a voter approved amendment to the state Constitution.

Senators aware of the basic framework of the plan said another idea is doubling the $25,000 homestead exemption to $50,000, but it may be tied to new home purchases.

That may address some of the perceived inequities between longtime homeowners and new ones.

Sen. Dave Aronberg, D-Greenacres, said there is talk of exempting the first $25,000 of tangible business property, such as copiers and computers. It was unclear how other aspects of the plan would benefit businesses and second home owners.

"I know we're going to get this done this year," Aronberg said. "I'm not convinced we'll get it done by May 4. But it will be this year because voters will throw us all out if we don't pass a tax relief plan."

How smoothly that goes depends on how willing both sides are willing to bend.

The House, which tackled the issue even before the session began, actually has two plans.

One involved a rollback to 2001 and a cap going forward. The second would require voter approval and calls for a rollback to 2003 but would give people the opportunity to eliminate all property taxes in primary homes in exchange for a increase in sales tax of 2.5 percent.

Despite opposition from rank-and-file Republicans, the House intends to hold a vote on that plan next week. House leaders lack the 90 votes that would put the changes before Floridians in a special election this fall.

Rep. Ray Sansom, the House budget chief, said this week that the tax swap plan is still the preferred choice of House leaders. But he said he looked forward to negotiations with the Senate.

"We will support any better plan that reduces taxes more than the House plan," he said.

House Speaker Marco Rubio, R-Miami, echoed that sentiment Wednesday. Rubio has previously dismissed portability and increasing the homestead exemption as only perpetuating inequities. But, he added, "We're also open minded about what we can get done and what can happen."

Times Capital Bureau Chief Steve Bousquet and staff writers Jennifer Liberto and Shannon Colavecchio-Van Sickler contributed to this report.