The Florida House & Senate have been having quite the little fight over changes to the state tax code. I've written about that many times here. Today our new Governor Charlie Crist finally put in his oar. His proposal is a compromise between the Houses & Senate (no surprise):
The overall savings under Crist's plan are double what the Senate proposed but are smaller than the House's projections of at least $47-billion (Says who? - THC). But it does not involve raising the state sales tax to mitigate huge cuts to local budgets, as House Speaker Marco Rubio, R-Miami, has sought...
- Rolling back local government tax bases to 2003. That would save taxpayers an average of $340 next year, and $1,987 over five years. Schools, water management districts and hospital districts would not be affected.
- Doubling the homestead exemption to $50,000.
- Save Our Homes portability. Homeowners could carry the accrued benefits of the 3 percent cap on annual assessments to new homes.
- A 25 percent tax reduction for first-time home buyers.
This is getting interesting, and promising.
As of now, all three plans call for a major roll back of local government taxes, and all three are based on a date, not a dollar amount or a percentage. That is very interesting. The argument is all about which date to use. Governor Crist is shading toward the Senate's date, but not by much. I think we can expect a roll back to '02 or '03.
Doubling the homestead exemption is pure Senate. Under the House version there would be no exemption because there would be no property tax at all on homestead properties. That's where the Houses increase in the sales tax % comes in. I prefer the house version, myself, but I acknowledge some provision needs to be made for renters.
Save Our Homes portability is huge, and all three versions - I think - have it. Without that the intrastate real estate market is paralyzed. For instance, empty nesters who want to move out of their three bedroom two and a half bath houses into something smaller cannot afford to because they're facing such a huge increase in property taxes -- an increase that makes no sense at all when you think about it. But even if they decide not to bring portability to Save Our Homes, they need to make that definite immediately -- right now nobody is moving because nobody wants to be the last one to be screwed by the change if it happens.
As for the 25% reduction for first time home buyers, I don't get it. Why should they get a special break? We ALL need and deserve a break.
I hope the House wins!