April 20, 2007 • 2:30 P.M.
Time to work out their differences

Both the House and Senate have confirmed property tax reform plans, and now it’s up to a joint committee to take the bills and, over the next two weeks, create a unified plan that everyone can support. But key issues conflict. It’s a complicated debate and lawmakers won’t necessarily pick a plan somewhere in the middle. Senators claim their plan enjoys broader support and point to their unanimous vote and bipartisan agreement, noting that the House had to debate their version for nine hours and still only passed it 78-40 in a vote largely along party lines. It’s also still unclear if a special election would be called this year to bring relief to homeowners as quickly as possible.

Areas of agreement

Tangible personal property tax: Both bills offer a tax savings to businesses’ tangible personal property, making some version of this tax savings a “given” in the final package, according to House Speaker Marco Rubio (R-West Miami). The change could remove the tax altogether for about 1 million of Florida’s 1.3 million companies.

Property tax rollback: Both bills tie a property tax decrease to an earlier year, though the Senate chose fiscal year 2005-06 and the House opted for either 2000-01 or 2003-04, depending on the bill. Negotiations will focus on which year to choose, but a rollback of some sort seems predetermined.

Spending limits: Local governments will have their spending tied to a predetermined limit, with increases tied to specific measurements, such as inflation and population growth.

Areas of disagreement

The big one: House and Senate tax cuts vary widely in style. The House wants to get rid of property taxes on homestead properties altogether while increasing the state sales tax to make up the difference. The Senate, however, stated its opposition to a sales tax increase; its plan looks more like the current system but with major modifications.

Portability: The Senate includes a portability measure, but it erases the transferred tax savings over time, so it’s only a temporary measure. The House has no need for portability since its bill gets rid of property taxes on homesteaded properties altogether; however, it does have a bill waiting in the wings that would allow property tax portability statewide. The House portability bill allows the concept to be discussed during the House/Senate committee negotiations.

First-time homebuyers: The Senate plan offers upfront savings in the form of an additional homestead exemption for first-time homebuyers, though it would decrease over time. The House plan does not offer additional savings for first-time buyers for the same reasons already noted – their program has no property tax in the first place.

So far, Gov. Charlie Crist has stayed above the fray and not thrown support to either tax reform plan. “I want to do everything I can to make sure that we have property-tax reduction that is significant, that gives the relief to the people that they deserve,” Crist said.