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Senate Approves Constitutional Proposal That Would Increase Homestead Exemption to $75,000

| May 2, 2017

Can local governments afford an additional homestead exemption? (Roger Smith)

Can local governments afford an additional homestead exemption? (Roger Smith)

A proposed property-tax break that would go before voters next year and a slimmed-down tax cut package, both tied to ongoing budget negotiations, got key approvals Monday in the Republican-dominated Senate.


The Senate approved a proposed constitutional amendment (HJR 7105) that, if passed by voters, would increase the non-school homestead exemption by $25,000 and potentially save homeowners hundreds of millions of dollars a year. The issue, a priority of House Speaker Richard Corcoran, now will go back to the House.

Meanwhile, the Senate Appropriation Committee slashed a $296.7 million House tax-cut package (HB 7109). The Senate changes would provide between $75 million and $80 million in tax breaks next fiscal year— primarily through a three-day back-to-school tax “holiday” and permanently eliminate sales taxes on tampons and other feminine hygiene products.

The proposed constitutional amendment to increase the homestead exemption was approved in a 28-10 vote after drawing heavy debate on the Senate floor.

Sen. Tom Lee, a Republican home builder from Thonotosassa who sponsored the bill, said expanding the exemption could help people afford homes. Also, he said it could boost such things as documentary-stamp taxes, which stem from real-estate transactions.

“Making homes more affordable, we’re going to allow people to move from rental units back into homes,” Lee said. “And in doing so, it’s going to give us the ability to generate revenue for doc stamps, the tangible tax and a whole host of other things that go along with home ownership.”

Because it is a proposed constitutional amendment, the measure needed 24 votes for approval. If all 15 Senate Democrats had voted against the proposal, it would have fallen one vote short. Only 23 Republicans were present because Sen. Dorothy Hukill, R-Port Orange, is recovering from cancer treatment, and former Sen. Frank Artiles, R-Miami, resigned last month.

But six Democrats — Lauren Book of Plantation, Daphne Campbell of Miami, Bill Montford of Tallahassee, Jose Javier Rodriguez of Miami, Darryl Rouson of St. Petersburg and Linda Stewart of Orlando — voted for the proposal. Appropriations Chairman Jack Latvala, R-Clearwater, was the only Republican who opposed the measure.

Democratic critics argued the measure would hurt renters and low-income people who would not benefit and also would lead to cuts in local services.

“This isn’t just about giving people a choice,” said Sen. Jeff Clemens, D-Lake Worth. “We haven’t told the people what (services) will be cut. It’s absolutely unfair and irresponsible for us to pass a potential tax cut without telling people what the cuts are going to be.”

But Democratic supporters said the proposal will make it easier for first-time home buyers and that lawmakers shouldn’t underestimate the ability of voters to understand the proposal’s potential impacts on local governments.

“I just find it easier to believe that they are not ignorant, are not alcoholics, are not like children with candy in front of them,” Rouson said of voters.

Currently, homeowners receive a tax exemption on the first $25,000 in value of their properties. They pay taxes on the value between $25,000 and $50,000 and then receive an exemption on the portion from $50,000 to $75,000.

The House last week approved a version of the proposed constitutional amendment that would have expanded the exemption to cover the portion of home values between $75,000 and $100,000. But the revised version approved by the Senate would apply the exemption to the portion of values between $100,000 and $125,000.

The House’s version was estimated to reduce local-government revenues by about $750 million in the first year, growing to almost $850 million a year within five years. The impact of the Senate version would be about $150 million less a year.

The proposal would also direct the Legislature to offset revenue losses for “fiscally constrained” county governments, which are in rural areas.

The flurry of activities on tax issues came as Corcoran, R-Land O’ Lakes, and Senate President Joe Negron, R-Stuart, worked to finalize details of a budget for the fiscal year that starts July 1. They face a Tuesday deadline for wrapping up the budget if they hope to end the annual legislative session Friday, as scheduled. That is because of a constitutionally required 72-hour “cooling off” period before lawmakers can vote on the budget.

Gov. Rick Scott proposed $618.4 million in tax cuts as part of his budget proposal, but it appears lawmakers will wind up with a substantially smaller package.

The House approved a package that included about half of the amount of cuts Scott wanted, and the Senate Appropriations Committee substantially reduced that package Monday.

The bill, which could go before the full Senate Tuesday, would scale back a proposed 10-day sales-tax “holiday” in August on clothing and electronics to three-days; eliminate sales taxes on feminine hygiene products — tampons, sanitary napkins and panty liners — but not diapers as the House had approved; and make a small reduction in a tax paid on commercial leases.

The House had proposed temporarily cutting the 6 percent lease tax by 1.5 percentage points on Jan. 1, 2018, a move projected to save businesses $190.7 million next fiscal year. Two years later, the rate would have gone to 5.5 percent, a mark intended to be permanent.

Under the change approved Monday by the Senate, the 6 percent rate would go down to 5. 8 percent.

Gone from the tax package that the House approved last week are a proposed nine-day sales tax “holiday” on hurricane supplies; a tax “holiday” on Veterans Day for people who provide proof of being honorably discharged U.S. military veterans; and a one-year exemption from sales taxes on college textbooks.

–Jim Turner, News Service of Florida

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