HomeMy WebLinkAboutSubmittal MemodUBMITTED INTO THE
,,,,, ,,,„PUBLIC RECORD FOR
INTER -OFFICE MEMORANIGEM D ON .
TO: Mayor Manny Diaz
City . • missioners
r
FROM: Pedro c a =
City Manager
DATE: April 11, 2007
SUBJECT: State of Florida Legislature
- Property Tax Discussion
andez, P.E. REFERENCES: Item D4.2 — Apri 12th
As we enter the sbcth week of the legislative session, both chambers have taken different
approaches to the property tax issue, with the House aggressively putting a plan out for
discussion and moving it legislatively while the Senate has opted to take its time in deliberating
the Issue.
At this time, the Senate majority has yet to release a plan or given any dear indications
as to what they wish to see in any property tax legislation. although we have received word that
they may release their plan today or tomorrow.
Senator Mike Harldopolos, Chairman of the Finance and Tax Committee who has been
tasked with crafting the senate legislation has indicated that every scenario includes a spending
limit for local governments that can be superseded by a vote from the city council and a proposed
tangible personal property exemption for businesses.
We expect that the roll back provision in the Senate proposal will not go as far back as
the House proposed 2003-04 level, the Senate will not propose any new taxes, and wit offer
some valuation assessment adjustments targeted to affordable housing and working waterfronts.
The Senate Is working on building consensus among ad its members, wishing to pass a plan out
of the chamber unanimously during a vote next week.
Meanwhile, House Speaker Rubio has scheduled votes on the plan below for
Wednesday of next week. In order to pace the issue before voters this year, a special election
would have to be scheduled, requiring 90 votes in the House. The plan may go to the voters
during the general election of 2008 if they don't reach the 90 votes needed given that differences
on the issue still persist in the chamber. The House Speaker has also indicated that a
conference committee will be named after the vote to commence negotiations with the Senate.
Below is a summary of the plans that have been put forth by the House Majority, House
Minority, and Senate Minority groups.
House BM
• PCB PBC 07-01 wee approved by the Policy and Budget Council and scheduled to be
debated on the floor of the House.
• Exempts homestead property from state mandated required local effort property tax
levies and offsets that revenue loss with a 1 cent sales tax.
• Allows voters to exempt homestead property from property taxes levied within the county
and offset that revenue with a 1 cent sales tax, which must be approved by referendum
by November 2010.
• Allows voters to exempt homestead property from all remaining property taxes and offset
that revenue with a half penny sales tax.
• Codifies tax relief and a cap on future spending growth by requiring local governments to
roll back their rates to 2003-04 and adjust them forward for population growth and
inflation; future tax levies cannot exceed this cap.
• Exempts the first $25,000 of tangible personal property value and grants the legislature
the authority to provide property tax relief to renters.
House Minority Proposal
• Contains a new rollback provision that would apply prospectively (CPI plus 3%).
• Creates a homestead exemption of 50% of the median county home value if greater than
the Save Our biomes differential.
• Provides an exemption for non -homestead residential equal to 25% of the county median
value of like properties.
• Provides an exemption for commercial property of 25% of the fast $1 million in value.
• Provides an additional one cent sales tax to fund the plan.
Senate Minority Proposal
• Full portability for downsizing and a limited portability for purchasing more expensive
tomes.
• Increase the Save Our Homes limitation from 3% to 3%4. and change in the CPI not to
exceed 6%.
• Limits the assessment increases on non -homestead real property to 10%.
• Provides a $25,000 exemption for tangible personal property for businesses.
• In regard to local government revenue, it imposes a 3-year property tax limitation on
property tax increases for all cities and counties.
• Property tax revenues could grow by the amount of new construction plus the percentage
change in the CPI plus 3%.
• It includes a rollback to fiscal year 2005-2006.
• Changes the assessment practices for affordable housing and waterfront property
(exduding hotels) making the appraisal dependent on income rather than projected
value.
• First time homebuyers will be eligible for a tax exemption, provided that the home is
below the medium just value of homestead property in the county of residence.
;uBMITTED INTO THE
UBLIC RECORD FOR
Cc: Jorge L. Fernandez, City Attorney
Priscilla A Thompson, City aerk
Larry Spring, Chief Financial Officer
Ignacio Ortiz -Petit, Sr. Asst. to the City Manager
SUBMITTED INTO THE
PUBLIC RECORD FOR
ITEM.a ON 4-u-o1 ,