Legislators Spar Over Property Tax Proposals

Although the public vote on whether to approve a super homestead exemption tax cut won’t take place until January, South Florida housing market legislators are already sparring over the effects of reducing property taxes by about $15 billion.

State Rep. Ellyn Setnor Bogdanoff, R-Fort Lauderdale, said the constitutional amendment would create a more equitable system than the Save Our Homes cap on tax increases for homesteaded property. She said legislators would make good on their promise to maintain education funds that would be lost from a reduction in taxable property.

State Rep. Dan Gelber, D-Miami Beach, said the state has no money in its budget to replace the $2 billion in property taxes public schools would lose should the amendment pass.

These representatives and State Sen. Steven Geller, D-Cooper City, debated some of business’ top priorities at a June 27 event at Nova Southeastern University in Davie sponsored by the Business Journal.

On the ballot
In addition to passing a law requiring local governments to roll back property taxes by varying amounts and then capping their budget growth, the Legislature put a larger tax cut proposal on the Jan. 29 ballot. The constitutional amendment would allow homesteaded Florida mortgage holders to replace Save Our Homes with a super homestead exemption - 75 percent on a home valued at $200,000 or less and up to $195,000 on a $500,000 home.

Bogdanoff said this would help about 70 percent of Florida homeowners, but far fewer in South Florida because homes here are more expensive. Many people who want a larger tax cut have contacted her, she said.

Gelber said the cuts would be devastating for public education, which collects 36 percent of property taxes. The state has been shifting education funding from state funds to property taxes and this year raised property taxes 7.3 percent to fund schools while keeping state public education funding static.

“It’s a joke to say ‘trust the Florida Legislature on education funding,’” Gelber said.

Broward County School Board member Maureen Dinnen brought three pages of unfunded mandates the Legislature gave schools in recent years, then complained about diverting funds from the lottery and slot machines to other uses.

“The state increased funding for education every year,” Bogdanoff said. “It may never be enough money, but it’s still one of our top priorities.”

Despite people complaining about higher taxes, Geller said the Florida real estate market ranks 39th in the nation in its level of taxation and 49th in education funding per student based on per-capita income.

“I’m getting tired of politicians who say you can cut taxes without cutting services,” Geller said. “There will be mass layoffs of police and firefighters.”

Affordable housing
The Legislature hasn’t addressed affordable Florida housing proposals this year and declined to hear Geller’s measure to remove the $243 million cap on a trust fund for affordable housing projects. The fund had $393 million, but the excess money was put back into the state budget.

Geller said all the money from the tax on commercial real estate transactions should go to affordable housing because that’s why the tax was created. The money isn’t enough to solve the affordable housing problem, but it would help, he said.

Bogdanoff said affordable housing must compete with the state’s other needs and legislators determined the money had better uses.

Geller does not believe the cap will be removed until the state has a year of solid revenue growth, which is not expected to happen for the 2008 budget year. He encouraged local communities to solve the affordable housing problem by allowing dense developments near transit corridors.