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PO Box 1212 Tampa, FL 33601 Pinellas Updated April 2006
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RETURN TO NEWS INDEX
Portable Property Tax Plan On Hold Like a mirage of cool water in the desert, tax portability for homeowners may be vanishing into the haze this legislative session.
On Monday, a Senate committee passed a bill that directs the state to undertake a long-term million-dollar study of options before action is taken on portability, the name given to tax benefits that transfer when a homeowner moves.
Under current law, the low tax rate that is protected in your home vanishes when you sell and move to a new home with a higher assessed value.
Last month, House Speaker Allan Bense suggested that portability would "rapidly move" to the top of the legislative agenda, but Senate President Tom Lee, R-Brandon, suggested a slower approach.
Bense, R-Panama City, supports the idea of a study but would like to see one completed sooner than the Senate suggestion of October 2007, said Bense spokesman Towson Fraser. A study that isn't completed until then probably wouldn't be considered by lawmakers until the 2008 session.
Some advocates for lower taxation agree that rushing would be a mistake.
"It's too complicated for a legislative session," said Harvey Bennett, a spokesman for Florida Tax Watch. A study would be a good idea, he said.
Rep. Carl Domino, R-Palm Beach Gardens, doesn't object to a study but notes that plenty of information is available. Domino has introduced portability legislation for the past three years and is trying to keep the idea alive via an amendment to another bill that is scheduled to be considered today on the House floor.
The legislation, by Rep. Carlos Lopez-Cantera, R-Miami, would raise the property tax deferral for senior citizens from $25,000 to $50,000.
The two key property tax control measures in Florida are the Homestead Property Tax Deferral Act of 1977 and Save Our Homes of 1992. The tax deferral takes $25,000 off the tax value of homes. Save Our Homes restricts any increase in the tax value of a home to 3 percent a year, no matter how much the property has gone up in value.
Other properties, such as businesses and second homes, don't have that cap. Critics say those laws in combination with the real estate boom have led to growing tax inequities. A recently purchased house can have taxes that are far higher than a nearby home that was purchased years before.
Voters and homeowners who have the locked-in rates tend to love such tax caps, but that may be a bit of a mirage, too.
California's Proposition 13 is one of the oldest and best-known property tax laws, said Michael New, a University of Alabama political science professor who has studied its effects.
Voters cheered Proposition 13 in 1978, but since then California has raised almost every other tax, New said. Property tax limits may not be the best long-term strategy for people who want to limit the size of government, he said.
"In the long term, government is going to find other sources of revenue," New said. People focus on property tax because they remember the single large bill, but it doesn't present a true picture of total tax burden.
Statewide, about $22.5 billion in property taxes were levied by cities, counties and school districts in fiscal 2005, up from $11.2 billion in 1995, according to the Florida Department of Revenue. That far outpaced population growth during the same period.
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