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House, Senate leaders agree on basics of property tax relief - from the Associated Press

TALLAHASSEE, Fla. (AP) - June 4, 2007 - House and Senate leaders agreed Friday on a basic outline for property tax relief and restructuring the Legislature will take up at a special session June 12-22.

House Speaker Marco Rubio, R-West Miami, and Senate President Ken Pruitt, R-Port St. Lucie, disclosed the results of behind-the-scenes negotiations in a letter to their colleagues.

They have agreed to take a two-step approach: immediate statutory tax cuts the Legislature can enact on its own and long-range reductions that will require voter approval through passage of one or more amendments to the Florida Constitution.

The statutory cuts that cities and counties would be required to make would be linked to how much they have increased taxes.

"Those jurisdictions whose taxes have grown the most on a per capita basis will be required to reduce them the most," Rubio and Pruitt wrote.

On the other hand, cities and counties, with the lowest increases would face the smallest cuts.

Schools would not be required to reduce taxes but no agreement yet has been reached on how to deal with those mostly rural cities and counties facing financial hardship and special districts lacking other revenue sources, the two leaders wrote. The latter include hospital and fire districts.

The leaders also agreed cities and counties should have a way to override the tax limits through some method such as a vote of governing bodies of more than a simple majority or a local referendum.

The long-term constitutional approach would do away with the existing $25,000 homestead exemption for primary homes and Save Our Homes Amendment, which limits increases in homestead assessments to 3 percent annually.

They would be replaced by a tiered, percentage-based super exemption. For example, the first $100,000 of a home's value might be 70 percent exempt, the next $100,000 would be 50 percent exempt and so on. Homeowners, though, would be able to keep their Save Our Homes benefits if those are better than the super exemption.

The House-Senate Select Committee on Tax Reform will try to come up with percentages and work out other details when it meets Monday.

"It's better than having a rigid dollar amount," said Senate Finance and Tax Committee Chairman Mike Haridopolos, R-Indialantic. "The percentage is a reflection of the economic times."

Rubio and Pruitt rejected a proposal by House Democrats to base the super exemption on a percentage of median home value in each county. That would have soften the financial blow on low-value counties, but it could have created new inequities by taxing nearby, similar homes at different rates just because they are on one or the other side of a county line.

House Democratic Leader Dan Gelber, of Miami Beach, said he was pleased by the agreement but worried it fails to address other aspects of tax relief. Gelber said in a statement that he hoped those issues would be resolved Monday.

"It is without question that this is a complex issue that if not properly addressed will bring our economy to a screeching halt," Gelber said. "As I have said many times, we can't solve one face of this Rubik's cube and then worry about resolving the remaining sides."

Florida Association of Counties Chairwoman Susan Latvala, a Pinellas County commissioner, was "cautiously optimistic" lawmakers are taking into account the need to preserve essential services provided by local governments.

"We appreciate the president and speaker's acknowledgment that a one size approach does not fit all communities by providing an override option," Latvala said in a statement. "In addition, we agree ... all taxpayers should benefit from property tax reform and the inequities within our current structure should be remedied."