Yesterday the special session of the Florida legislature ended with a program to reform property taxes in the works. Despite warnings from schools, local governments, firefighters, and police departments that services to the public would suffer, Republican lawmakers allowed few alterations to their proposals. The only one that seemed to have gotten by is to give property owners the option of retaining their "save our homes" savings if they choose to do so. Only as owners sell or die will these homes be phased out, lengthening the process. By allowing this, the projected tax cut will drop from $31.6 billion dollars to $24 billion.
Legislation that was passed will force local governments to freeze taxes for 2008 at this year's levels. From that point on they must decrease the taxes from 3% to 9%, depending on how rapidly the property owners' taxes had risen in the past. Future increases will be limited by an index based on the inflation rate. It is believed that this move alone will trim taxes throughout the state to the tune of about $15 billion.
The legislature also will place before the voters a constitutional amendment that would create a "super exemption". Instead of the current Homestead Exemption which removes the first $25,000 of assessed value for primary, or homesteaded properties, this super exemption will allow homesteaded property owners to take off 75% of the assessed value and be taxed on the remainder for homes valued up to $200,000, and 15% for the next $300,000 of value. That is how I understand it anyway. If this is approved by the public, the state predicted that it will cut taxes $16 billion. However, as I mentioned above, if homeowners can opt to keep their "save our homes" status, this amount would be reduced. Voters will have a chance to weigh in on this amendment on January 29, 2008.
No one likes taxes, that is for sure. But they are a necessary evil. With such huge tax reductions predicted, it still remains to be seen how the Republican controlled legislature will keep our schools, police, firefighters, park system, local governments, etc. running. Let's hope that this is not one of those occassions when everyone cheers when a new program is enacted and then within a short time they are all looking for the "tar and feathers" and "finger pointing" becomes the state sport.
John Elwell - REALTOR
Bill Nye Realty, Inc.
Licensed in Florida