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Deal on property tax struck, but details few: Miami Herald 6-2-07

BY MARY ELLEN KLAS AND MARC CAPUTO

Florida legislative leaders said Friday they have agreed on a method for giving homeowners a super-sized property-tax exemption while rolling back taxes in a new way to punish local governments that have gobbled up the most tax money.

But while they hailed their announcement as a ''substantial agreement,'' lawmakers failed to give details or dollar figures that would show how much the cuts are going to save people, how much they're going to cost local governments, and who will benefit the most and least.

''The heavy lifting is coming up now, and that is how much to cut. On that we don't have agreement,'' said House Speaker Marco Rubio, who announced the tentative deal with Senate President Ken Pruitt.

The agreement to focus on homeowners leaves out the taxpayers who have been hit hardest by the run-up in property taxes in the real estate boom since 2000: snowbirds, investors and commercial property owners.

Those details -- as well as how to target breaks for poor seniors, marina owners and affordable-housing providers -- will be discussed Monday by a joint committee of House and Senate members and voted on by legislators in a special session scheduled for June 12-22.

The agreement announced Friday would:

• Give homeowners a super-exemption using a so-called ''tiered'' method that would grant owners of less valuable properties a higher percentage break than owners of expensive properties.

Under one scenario, owners of a $1.5 million home could pay taxes on 20 percent of the first $300,000 in value, 30 percent on the value up to $1 million and 70 percent of the value above that. The size of the percentages and the baseline home values on which they will be applied have not yet been determined and won't be decided on Monday. That decision will be left up to Rubio and Pruitt.

• Phase out the Save Our Homes property-tax protection, but allow homeowners to keep it if it provides them a better deal than the new method. Under Save Our Homes, the increase in value of a home for tax purposes is capped at 3 percent a year. Phasing out Save Our Homes and allowing super-exemptions will need approval from 60 percent of voters statewide.

• Spare schools from tax cuts. Legislators this spring approved a $546 million property-tax increase -- a 7.4 percent jump -- to help schools pay to reduce class sizes.

• Force counties, cities and special taxing districts to cut taxes, based on how much they raised taxes over an as-yet-undefined period of time. The more a government collected, the more its property tax collections would be cut.

HURT THE LEAST

Duval County, which has held the line on tax increases and spending, would be hurt the least, while counties like Miami-Dade or Flagler would bear bigger cuts. Also, poor counties would not be cut as deeply. This part of the plan doesn't need voter approval.

• Allow local governments to avoid the cuts and the caps with the approval of voters or a super-majority of the governing commission.

• Limit the growth in property tax collections by tying it to the growth in personal income.

In adopting this approach, legislative leaders rejected a plan pushed by House Democrats that would have tied the super-exemption to the median value of homes in each county.

Rubio said that would have encouraged more waterfront development and discouraged affordable housing in counties with high home prices.

Democrats point out that Rubio's tiered method, based on the value of each property, will likely result in bigger tax savings for the wealthy. Rubio said wealthy taxpayers deserve a big tax break because they pay big taxes.

ANOTHER ADVANTAGE

Another advantage for Rubio: Tax cuts for the wealthy bring in a bigger bottom line savings to boast about. Rubio's refusal to back off deep cuts scuttled tax talks this spring, as senators worried his plan would eviscerate local government services.

House Democratic Leader Dan Gelber was worried that Republican leaders still have few details and little information to help cities and counties understand the impact.

''I'm glad they're moving, but I'm concerned we will not have enough time to land this thing in the special session in a responsible way,'' he said. ``We need to give homeowners, and city and county governments, a chance to comment.''

Senate Democratic Leader Steve Geller of Cooper City, the only lawmaker who repeatedly -- and accurately -- predicted that the regular session would end without a tax cut, said he's getting that feeling again.

''There is no number for the tax cuts,'' Geller said. ``And that's what this is all about: How much will we cut taxes by?''

One of the Senate's tax negotiators, Republican Mike Haridopolos of Melbourne, said the strength of the plan is that it provides cuts for all taxpayers but doesn't punish governments that acted appropriately.

Rubio said there is ''general agreement'' on giving owners of commercial and nonhomesteaded property a flat-tax exemption based on the value of their property. The question is what the number will be.

Rep. Jack Seiler, a Wilton Manors Democrat, said it's no easy task getting the numbers right. But at least they've agreed on how to get there.

''Nobody's high-fiving and heading out the door,'' he said. ``But at least we're finally getting on the same page.''




© 2007 Miami Herald Media Company. All Rights Reserved.
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