Panel revives the property tax swap

Nov 30, 2007


The Miami Herald

The tax swap is back.

A plan to replace some property taxes with a temporary increase in the sales tax is under review by the panel that has the power to put such an amendment directly on the November 2008 ballot — the Taxation and Budget Reform Commission.

The idea by panel member Carlos Lacasa, a Miami attorney and former state legislator, is to give every homeowner a tax exemption worth half of their property’s market value. To cover the $12 billion that public schools would lose from the exemption, the state’s six-cent sales tax would increase by a penny.

If placed on the ballot and approved by voters, the tax exemption would be phased in over two years and the one-cent tax would sunset after three years, forcing the state Legislature to find a way to come up with the money.

”In those three years, a lot of things can happen,” Lacasa said. “Budgets get cut, the legislature can eliminate tax exemptions or figure out how else to pay for it.”

Nonhomestead property owners would also get a tax savings under the plan. The increase in the assessed values of their property could grow no more than 5 percent a year, similar to the 3 percent Save Our Homes cap now enjoyed by homeowners who claim year-round residency in a home or condo.

Lacasa’s is the second property tax proposal to be presented to the tax commission. Former Senate President John McKay last month filed a plan to eliminate the portion of property tax that pays for education and replace the money by eliminating existing tax exemptions and extending the sales tax to professional services, such as accounting and legal services.

The tax commission meets until May and has the power to put constitutional amendments before voters that change state tax and budget policy.


Lacasa said he wants the panel to consider his proposal as a starting point. He is still working on cost estimates to local governments and savings to taxpayers. Last year, property taxes that pay for schools generated $12.3 billion.

”The big picture here is that the tax structure of Florida, especially as it relates to schools, has to be revisited,” he said.

His proposal blends two ideas that emerged from the House of Representatives earlier this year and it has the support of House Speaker Marco Rubio, Lacasa said. Rubio appointed Lacasa to the tax commission and offered his staff to help draft the plan.

Rubio proposed eliminating all property taxes and replacing them with a 2.5-cent increase in the sales tax during the spring special session — a plan that promised a savings of $44 billion to taxpayers and a massive reduction in local government revenue.

The tax swap plan passed the House but was rejected in the Senate, leading to a stalemate that forced the Legislature into two special sessions on property taxes this year.

In October, the House adapted a Democratic plan and passed a less expensive ”super exemption” equal to 50 percent of the median value of property in each county, up to $500,000. The plan was rejected by the Senate.


Instead, lawmakers agreed to a constitutional amendment that goes before voters Jan. 29. It proposes to give homeowners tax ”portability,” the ability to carry savings from the Save Our Homes cap with them to a new home when they move.

Lacasa said Rubio supports the proposal, but the West Miami Republican has also thrown his support behind a citizens’ petition drive to amend the state Constitution to limit property taxes to 1.35 percent of the taxable value of all property.

A home or business with a taxable value of $100,000, for example, would pay $1,350 in taxes — cutting taxes 26 percent on average.

But the earliest that plan could make it to the ballot is 2010, and Lacasa is not supporting it.

”It’s a competing idea,” he said. “I’m glad that they’re doing it and I’m glad that they’re getting signatures, because they’re gathering a huge database of people who want reform.”