June 14, 2007
Florida Senate passes Super Tax Exemption!
Today the Senate cast a 25-12 party line vote to pass the biggest tax-cut in state history, immediately rolling back and capping local-government spending and asking voters to consider a plan to supersize Homeowner tax exemptions. The exemptions would give Homeowners an exemption worth $50,000 to $195,000. Homeowners could elect to sign up for the new exemption or keep the current 'Save Our Homes' tax cap. That Homestead Exemption gives homeowners a $25,000 tax credit and a 3 percent cap on annual assessment increases - that plan was adopted in 1992.
The new plan proposes the following: It exempts 75 percent of the first $200,000 of a home's value and 15 percent of the next $300,000.
An estimated 73 percent of folks with a Homestead Exemption would initially get a lower tax bill with an estimated average cut of $1,300, or 44 percent, in the first year.
The downside is that without the cap, taxpayers could end up with bigger percentage increases in the future. Some Republican leaders feel that could hurt homeowners in the long run. There is also fear that the new tax will drain education funding.
Senator Dave Aronberg of Greenacres says: "I support tax cuts, but I will not vote for a tax cut on the backs of our students...you can't fund schools on hollow promises, no matter how well intentioned."
Senator Mike Bennett, R-Bradenton says: "You're going to have every police department, every fireman, you're going to have every school teacher, everyone rallying against it."
This new plan aims to cut taxes by $16 Billion Dollars over the next five years. Lawmakers don't have any answers about where they will get money to pay for programs which had relied so heavily on these tax dollars in the past.
Local Real Estate professionals are hopeful that this tax cut will reignite the market. Buyers who have been standing on the sidelines now have a reason to get back in the game. I'll be watching this one closely.
'Til next time!
Mike Mason
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