From the desk of State Representative Pat Patterson:
Dear Neighbor,
Over the course of the past six months, you and numerous other like-minded citizens wrote to me to express your views on potential changes to Florida's property tax system. By now you have probably read or heard that my colleagues in the Florida House of Representatives and I passed comprehensive property tax reform last week during a special session of the legislature. Since you were thoughtful enough to contact me with your suggestions, concerns and much-appreciated advice, I thought I would take a few minutes to get you up to speed on precisely what was accomplished. A detailed summary of the reforms we passed and what happens from here is below for your review.
It's important to note that all of what I will outline for you can also be summed up in one succinct statement: every property tax payer in our state will see reductions in their next tax bill. The reforms made by your legislature will provide long overdue relief to taxpayers and a valuable boost to our state's economy. And this is achieved without forcing local government to reduce any essential services!
WHAT WAS CHANGED?
The changes adopted during the Special Session of the Legislature were broken up into two bills. The first addresses tax rates imposed by local governments. The second comes in the form of a proposed constitutional amendment.
Tax Rollback & Capping Future Revenues
Passed by a near unanimous vote of the legislature, all property owners will see an immediate reduction in next year's taxes. All governments will have to roll back their rates to the 2006 fiscal year levels. The size of the cuts will vary from city to city and county to county based on each individual government's spending habits.
Perhaps more important though, HB 1B also creates a predictable system for increases in future years. Revenues to local governments will now be limited to growth in per capita income and new construction. Exceptions are permitted only when a super-majority of the governing body or the voters in that municipality vote to override the new revenue cap
Constitutional amendment
All voters will have the chance this coming January to forever change Florida's property tax structure. My colleagues and I voted to give the voters the largest say as to how our property tax system should be organized. If agreed to by 60% of the voters who go to the polls on January 29, 2008, SJR 4B will create a new super Homestead exemption that eliminates tax liability on the first 75% of value on primary homes up to $200,000 in value. Further, 15% of a home's value for the amount ranging from $200,000 to $500,000 would also be exempted.
If successful at the ballot box in January, primary residents who choose this plan would see it replace the current $25,000 exemption and 3% Save Our Homes cap. It is important to note, however, that no homeowner will be required to make this change. Because many residents benefit so remarkably from the Save Our Homes protection, we as a legislature felt it vital to make this exemption exchange fully optional. Anyone who wishes to remain protected by Save Our Homes will have the right to do so for as long as they reside in their current home.
WHO SAVES?
The following is a brief run-down of who will benefit from the property tax relief package passed during the special session:
All property tax payers
In the most basic terms possible, it is simply a fact that anyone who pays property taxes in Florida will see reductions in their next tax bill. And while the savings will vary by each city and county, by placing in state law strict revenue caps the protect taxpayers against volatile increases in future years, one can easily see that the bleeding has stopped.
Additionally, if passed by voters in January, the constitutional
amendment portion of this reform package will offer even greater
benefits to several classes of taxpayers.
Tangible tax benefit for businesses
Under the proposed constitutional amendment, small businesses will see an average savings of $2,100 per year with a reduction in the amount of tangible personal property taxes paid. Tangible personal property valued at up to $25,000 will be exempt from taxation under the terms of SJR 4B
Affordable housing
SJR 4B will authorize the legislature to provide statutory tax relief for homes classified as workforce or affordable housing.
Low-income seniors
Residents 65 and older who have a household income below $24,214
annually will see an additional $50,000 in exemption applied to their homestead property.
WHAT DOES THIS MEAN?
Aside from the reduction in property taxes, many have asked me what
effect this legislative action will have on a variety of areas. The
following is a brief explanation of the impact property tax reform will have on government, the economy and our families:
Services
Ensuring local governments have the necessary resources to provide
fundamental services to citizens is something the legislature has
respected throughout this process. While my colleagues and I were of the belief that government spending had reached a boiling point for many residents, I feel the legislation we passed was careful to protect essential services like education, police, fire, medical rescue and trash collection. While there will be arguments on both sides of the discussion that the rollbacks go either too far or not far enough, striking a common ground that provided relief and protected essential services was an achievable goal.
I'm pleased to report that not only have many city and county leaders throughout Florida already indicated essential services can be preserved under this plan, the leadership in both the Republican and Democratic parties in the Florida House of Representatives has also vowed that education funding will remain unharmed as a result of these changes!
Economic Gains
Florida's economy was beginning to feel the negative effects of high property taxes in recent years. Our real estate market has slowed considerably and retail sales were being hurt in the crunch of higher taxes. By cutting property taxes across the board now and brining economic predictability to the table in the form of future revenue caps, Florida's booming real estate market now has the potential to resume.
With that brings a needed spike to our businesses in Florida in retail sales.
"Un-trapping" Florida families
Millions of Floridians have talked of being "trapped" in their homes due to the current tax structure. By passing the constitutional amendment on January 29, 2008 and creating a super Homestead exemption for primary residents, no longer will Florida's growing families looking to move to a larger home or seniors seeking to downsize to a smaller one be hit with an avalanche of new property taxes when purchasing a new home.
Fairness to all
Above and beyond the numbers - whether they relate to government or to our residents - the property tax reforms are fair to all groups of taxpayers. Our current system - though beneficial to some - created an uncompetitive environment for businesses, recent home buyers, and second-home owners. With the passage of HB 1B and SJR 4B, a much more transparent and equitable tax system can be achieved.
I hope as you learn more about the reforms we have put in place that you will feel free to contact my staff and me should you have any additional questions. I appreciate the opportunity to serve you and to address your respected views on property taxes in our state.
Best regards,
Pat Patterson
Phone: (386) 736-5100
Fax: (386) 736-5102
E-mail: Pat.patterson@myfloridahouse.gov
Mailing address:
230 N. Woodland Blvd. #222
DeLand, FL 32720
