Florida passes $12 billion property tax cut plan

TALLAHASSEE, Florida (Reuters) - Responding to skyrocketing coastal property values and taxes, Florida lawmakers on Monday passed a proposed constitutional amendment that backers say would cut local property taxes by $12.5 billion over the next five years

After 11 days of number crunching and posturing, House and Senate members agreed to double the state's $25,000 homestead exemption and allow homeowners to take tax cap benefits with them when they move.

Further, they agreed to expand a popular tax cap by limiting tax increases on commercial property, vacation homes and investment properties to 10 percent a year. Since a 1992 referendum dubbed Save Our Homes, homeowners now enjoy a 3 percent cap on annual local tax increases.

But the Senate stripped other House-backed provisions affecting low-income elderly residents, first-time home buyers and waterfront businesses. The omissions prompted many to criticize the plan as an opportunity lost.

The Senate passed the measure 35-4. The House followed a few hours later on a 97-18 vote after hours of sometimes fiery claims that the final plan did not go far enough.

Voters must approve any changes on January 29 when members of both major parties also cast ballots in the state's presidential primaries.

Citing polls and a requirement that any proposed constitutional amendment must be approved by 60 percent of voters, leaders said a more comprehensive package of savings would not pass.

"Because of the simplicity of this plan, the public has the opportunity to vote for real tax relief ... that will put money in their pockets," said Rep. Dan Webster, a Republican from Winter Garden.

The plan increases the homestead exemption from $25,000 to $50,000. The additional exemption would not apply to taxes levied by public schools, which are required under another constitutional amendment to reduce class size.

Moreover, the proposal expands the Save Our Homes measure allowing homeowners to take their accrued savings with them if they purchase a more expensive home. A person who buys a less expensive home will carry a portion of the tax savings with them.

The tax package is expected to save homeowners an average of $240 a year, but the portability provision would cost school districts more than $2 billion in lost revenue over the next five years. The hit to schools was a rallying point for many who said the taxpayer benefits did not justify the cuts to education.

Another proposal to eliminate property taxes for low income seniors was also jettisoned.

"This is not even close to being good enough," said House Democratic Leader Dan Gelber of Miami Beach.