Save Our Homes, the constitutional amendment that has shielded homeowners from taxes on $404 billion worth of property
value this year, has spawned a new tax revolt in Tallahassee: Save Us From Save Our Homes.
The
supporters are not typical homeowners - they're state legislators who will meet this week to vote on a plan to phase out
the Save Our Homes tax cap because it has distorted the tax system, shifting billions of dollars in taxes to businesses, investors,
snowbirds and, most importantly, recent home buyers.
But one thing stands in their way: the very
voters they need to approve the plan by a 60 percent margin. Most of those voters are long-time homeowners who have enjoyed
the richest benefits from Florida's current property tax system.
Legislators are touting the
plan - which would remove $31.6 billion from property tax rolls over five years - as the biggest tax cut in state history.
But it will also cut government services, reduce tax money to schools and set up two permanent classes of taxpayers in a system
that could run afoul of the U.S. Constitution. Lawmakers will decide in their 11-day special session starting Tuesday whether
this is the package to bring before voters in a Jan. 29 special election.
Many homeowners, like
Thomas Hardt of Fort Lauderdale, who has lived in his Victoria Park neighborhood for more than three decades, see no need
for a change. He's not impressed with the Legislature's promise of tax savings if he votes to phase out the Save Our
Homes system, which has capped increases in the taxable rate on his home at 3 percent a year since the act took effect in
1995.
"Save Our Homes has made it possible for me to stay in this house," said Hardt,
a 64-year-old retiree. "I couldn't have lived here without it because of taxes and the cost of living. I'm happy
where I am."
According to a new poll by Zogby International for the Miami Herald and WFOR-CBS
4 in association with The Palm Beach Post and WPEC-CBS 12, at least 64 percent of voters say Save Our Homes has saved them
money. And only 47 percent statewide support replacing Save Our Homes for another tax system that shifts less of the burden
onto others.
While lawmakers may take some comfort in the fact that in South Florida 52 percent
of voters say they would like to make the system fairer, it's still not enough to get to the 60 percent threshold needed
to change the state Constitution.
But Hardt also makes the Legislature's argument about people
being unable to move because of higher taxes on their new home: If he wasn't happy in Fort Lauderdale, "I couldn't
afford to move anywhere around here anyway," he said. "I'd really get penalized for moving."
That's exactly why legislators have come up with their constitutional amendment asking voters to approve a super
homestead exemption of up to $195,000 on any primary home. It would replace the current $25,000 homestead exemption, phase
out Save Our Homes and grow larger as personal income grows.
"If we do nothing and you can't
move, there will be a tax revolt," said Sen. Dan Webster, a Winter Garden Republican and the Senate's lead property
tax negotiator. He believes Save Our Homes "is a failed policy ... it hurts the economy; it hurts other taxpayers; it
hurts new home buyers and it hurts people who now have the benefit and want to move."
The
current system has been so good to so many for so long that legislators for months have tied themselves in knots trying to
come up with some system that's almost as good a deal for homeowners.
First, they considered
eliminating all homestead property taxes, and replacing the lost revenue with a hike in the sales tax. Then they toyed with
the idea of making the tax savings portable - letting homeowners carry their tax breaks to a new home - but legal scholars
warned that would just make the imbalance worse.
Finally, legislators and Gov. Charlie Crist have
arrived at this solution: bribe homeowners. All homeowners would get a 75 percent exemption on the first $200,000 of their
home's market value. After that, a 15 percent exemption applies to the home's value between $201,000 and $500,000.
The greatest selling point of the plan: 73 percent of all owners of homesteaded property will get a better deal under
the new plan - and those who would benefit more under the current Save Our Homes system can keep it.
By
contrast, the plan offers far less tax relief to commercial property and owners of second homes.
"Once
people have the benefit it is difficult to pull it away from them," Webster said. "That's one of the reasons
we put a good chunk of the savings into homeowner's benefits and there's no flat rate exemption for commercial or
non-homestead residential."
But the concept still could be a hard sell. In addition to the
fact that outside of Tallahassee there is no desire to replace Save Our Homes, the plan requires some pain. It proposes an
$8 billion cut to schools and requires local governments to scale back their budgets to accommodate the $31.6 billion tax
cut over five years.
Republican legislative leaders say they are determined to replace the schools
money with state revenues, bonds or by allowing school districts to raise taxes back. But some Democrats are not so sure.
"Do you really think voters of this state are going to vote for something that takes $2 billion a year away
from education?" asks Sen. Steve Geller, the Senate Democratic leader from Cooper City. "I don't think they
get the votes."
The Zogby poll of 801 likely Florida voters, conducted June 4-6, found there
"isn't any evidence of a tax revolt here," said pollster John Zogby. Instead, Floridians say they "like
living in Florida and there is a just a trade-off - a general agreement that part of the price of living here is we've
got to pay a little bit more."
Finally, a legal analysis of Florida's property tax system
done by two constitutional scholars hired by the legislature last year warns that any plan that sets up two permanent classes
of taxpayers - those under the new system and those with big Save Our Homes protections - could make the state "more
vulnerable to an attack" in court.
The governor and Republican legislators, though, say they
are pushing through.
"I think it's exactly what people want," Crist said Friday
as the new plan was released.
House Speaker Marco Rubio, a West Miami Republican, concedes legislators
will have to educate voters but he sees no turning back.
"We're going to have property
tax cuts in Florida one way or another," he said. "Either we pass them or people are going to leave because they
can't afford to live here anymore."
