Cutting back on explosive government spending and repealing a 3 percent cap on homesteaded properties could be among the ways to resolve a runaway property tax crisis, a research group told a review panel Friday.
Floridians already had one of the highest local tax burdens in the nation before taxable values skyrocketed another 25 percent this fiscal year. Property taxes now account for $25.7 billion of the state's revenues - its largest single source of dollars.
However, Friday's recommendations by the business-backed group TaxWatch to the Property Tax Reform Committee to repeal the 3 percent cap and not double the existing $25,000 homestead exemption is likely to run into plenty of opposition. Both are popular with many homeowners.
"It's going to be a tough job," conceded Harvey Bennett, spokesman Tax Watch, which monitors government spending and taxing. "But there are a growing number of property owners who are realizing the flaws in the system."
Homeowners can now limit their property's taxable value to a maximum increase of 3 percent a year by taking the homestead exemption for their primary homes. But the provisions of the 1992 Save Our Homes amendment don't apply to businesses, rental properties and vacation homes.
The property tax committee on Friday labored through a 77-page preliminary report that contained some potential recommendations and hoped to focus on the portability issue and increasing the homestead exemption at its next meeting, Jan. 29.
"We're looking at dramatically changing things," state Rep. Dave Murzin, R-Pensacola. "Let's talk about replacing property taxes with a sales tax and that way people would spend that money all through the year rather than save up and write a check to government."
At a hearing last month in Tampa, the tax reform panel heard testimony that some Florida residents have begun fleeing the state because of the soaring property taxes.
"I think our work is pretty clearly laid out for us," panel chairman Don DeFosset, former president of Jim Walter Homes, said Friday. "I think we've set a stage for a lot of additional work."
Recommendations from the governor's committee also could be forwarded to the Taxation and Budget Reform Commission that will meet for the first time in 2007 as required by the Florida Constitution. The commission can send proposed constitutional amendment directly to the ballot.
Gov. Jeb Bush, who leaves office next month, appointed the panel to look into possible property tax inequities resulting from the measure voters approved 14 years ago.
The subject was one of the hot issues during the recent governor's race.
Incoming Gov. Charlie Crist, who defeated Democratic nominee Jim Davis in the Nov. 7 election, supports doubling of the homestead exemption from $25,000 to $50,000 and supports portability, which would allow homeowners to keep their old tax bill even if they move to a more expensive home. Crist noted that his own parents can't downsize to a smaller home because their taxes would sharply increase.
U.S. Census Bureau data ranked Florida's local tax burden 16th nationally in fiscal year 2004 and that was before taxable values skyrocketed another 25 percent in the current fiscal year.