Tax-cut letdown: Numbers may not add up

[Judi Lynn]

Source: Miami Herald

Posted on Wed, Jun. 13, 2007
Tax-cut letdown: Numbers may not add up
Florida lawmakers are discovering they may not be able to cut property taxes sharply while maintaining vital services.
BY MARC CAPUTO AND MARY ELLEN KLAS
[email protected]

TALLAHASSEE -- On the first day of the special session to lower property taxes, here's what lawmakers started cutting: expectations for a huge tax cut this year and a January vote for even bigger savings.

The Republican-led Legislature didn't appear to have the votes Tuesday to push deeper cuts more quickly because Democrats oppose $7.2 billion in school cuts over five years in the $31.6 billion plan.

But the schools dispute belies the real trouble: It's almost impossible to fix the complicated tax system, protect local services and fulfill simple promises made by Gov. Charlie Crist and House Speaker Marco Rubio, who have raised public expectations of deep tax cuts.

The two Republicans have barnstormed the state separately for months. Rubio held out for bigger cuts in the recent legislative session, promising people will get a tax bill ''they can afford.'' Crist repeatedly pledged a reform that will send ''a sonic boom'' that will kick start the state economy when taxes ``drop like a rock.''


Read more: http://www.miamiherald.com/458/story/137819.html

[kdmorris]

1. Property taxes aren't the problem

Insurance costs are the problem. Our house is homesteaded and our property tax has only gone up 3% per year. Our homeowners insurance has gone up 300%. Crist is looking a lot more like a Republican these days. I notice the whole "fix homeowners insurance" initiative went quietly away and I'm STILL paying $3600 a year in homeowners insurance. (up from $1900 last year, which went up to $1900 from $988 the year before that!) Our mortgage went from $1034 to $1351 just to pay back the escrow and put in enough to pay next years homeowners insurance.

This really pisses me off. I don't see an issue with the property taxes. Fix the damned homeowners insurance issue.

[ChiciB1]

7. I Completely Agree With You... My Insurance Went SKY HIGH This Year!

I really didn't want to do it, but was forced to raise our deductible and opt for only 25% coverage on the contents in our home. My insurance went from around $2,000.00 to over $4,000.00 in one year! Then we are required to carry Flood insurance on top of that because we live close to the Gulf of Mexico! I know people who just didn't buy insurance because they own their homes and aren't required to carry it. Very risky business, but what can you do??

We don't have an escrow account and pay for our taxes and insurance each year and it hit very hard this year. We also have 5 acres of property up for sale in North Port and the taxes on it were $4,600.00, up from about $2100.00 last year. If you have property that's not homesteaded they can raise the taxes as they wish. Our home can only be raised by 3%, but they socked it to us on the acreage. We've had it up for sale for over a year now and the market is pretty bad. Since we bought it back in 1989 for a very low price we can hold out a little longer to see if things will change. If not, we will have to lower our asking price if the taxes keep going up because we will have to dump it before we start "losing" money due to tax hikes!

I've made the comment more than once that before we know it, only the RICH will be able to live in Florida. Unfortunately home sales are down and it's almost impossible to sell unless you want to get ripped off. Not only that, my husband is a native and most of his family lives here so we won't be going ANYWHERE ANYWAY!!

It does cost way too much for insurance though!

[ClintonTyree]

2. It may be time for a State Income Tax....

Florida has avoided it thus far but there comes a time when economic realities outweigh stubbornness. Florida's school budgets simply CANNOT be pared further without destroying the entire system completely. They're already bad enough.

The RepubliCON mantra of "tax cuts at all costs" must be laid to rest. It cannot work. People still want all the goodies government gives them but they don't want to pay for them. It's time for a reality check in The Sunshine State.

[seasat]

3. I agree or a sales tax expansion.

The income tax would be better but harder to get approved. It would fluctuate less with the economy. Unfortunately, there are too many folks with influence ($$$) in Florida that come here because we don't have an income tax.

Several folks have championed expanding the coverage of the sales tax to certain services and dropping most of the over 300 exemptions to it Jebbie and the Repugs weaseled through. However, the Florida Chamber of Commerce has such a huge influence that they kill that each time someone tries to push it through.

Jebbie paid for all those cuts and the elimination of the intangibles tax by shoving more of the funding for education on the local governments. IMHO, the elimination of the Save Our Homes clause and the implementation of the Super Homestead Exemption is a step in the right direction. I agree with you that it needs to be coupled with a state income tax. They also need to remove the "best use" method of determining property tax rates to help small businesses and appraise them based on current use.

[kdmorris]

4. Why is eliminating the Save Our Homes clause

a good thing? Why not just make it portable, rather than doing away with it completely? Seems to me that if you get rid of that clause, many long time homesteaders will get hit with higher property taxes each year, thereby allowing "Elderly people are being taxed right out of their homes" to become a reality.

[seasat]

5. A large homestead exemption works better (IMHO)

The Save Our Homes Clause disproportionately benefits large McMansions over smaller family homes. It put local governments in a bind since it caused them to lose a lot of revenue from the expensive property owners who could afford the high taxes. A real problem with property taxes is that the poorest face increased burdens from higher rents since non-homesteaded property could not qualify for the either the Save Our Homes or exemptions. By taxing the wealthiest more, local governments can afford to reduce their millage rates.

[kdmorris]

6. Thanks!

I read the article and did a little math on my own property tax (a Super Homestead Exemption vs the current way we do it). The taxable amount of our property would actually go from $95,000 to $42,000 or so. I don't think that will necessarily cut our tax in half, but it doesn't make it nearly as scary.

I appreciate the response. My insurance rates are still the biggest killer right now. But a little break might be something to look forward to after I'm done paying off the "overage" in my mortgage escrow.

[Sancho]

8. I agree, it's the insurance...

We've been here 15 years, and the taxes have gone up a little with Save our homes....but my insurance company left the state. Now I'm on Citizens and the premium went from less than 1000 to 3500 a year. It also doesn't cover anything!

Crist is in the insurance companies pockets.