By BILL KACZOR THE ASSOCIATED PRESS
Published Friday, Feb. 15, 2008 at 4:30 a.m.
TALLAHASSEE — A lawsuit challenging inequities in Florida's property tax system could cost local governments and school boards billions of dollars, but one lawmaker says he has a solution, and it is a familiar one.
Rep. David Simmons proposes a percentage-based exemption that would replace or work together with the existing Save Our Homes Amendment to equalize taxes paid by longtime homeowners and recent buyers. It is something the Legislature tried last year but then dropped.
The lawsuit alleges Save Our Homes and Amendment 1, which voters adopted Jan. 29, violate equality provisions in the Florida and U.S. constitutions because the two measures give longtime homeowners much bigger tax breaks than recent buyers.
Save Our Homes caps annual assessment increases at 3 percent for primary homes, or homesteads. That has meant the plaintiffs, three homeowners in Port Charlotte, Tallahassee and North Palm Beach, and other recent home buyers are paying much higher taxes than longtime residents with homes of the same or similar value.
Gov. Charlie Crist, who led the Amendment 1 campaign, has said he is confident both amendments will withstand the challenge, but Simmons, R-Maitland, is not so sure.
Simmons, a lawyer, says Amendment 1 is "the very Trojan horse that may cause" Save Our Homes to be declared unconstitutional.
"We truly jeopardized the fiscal responsibility that we have to the people of the state of Florida," Simmons said.
The lawsuit, filed in state court here, alleges Amendment 1 increases the disparity through a "portability" provision that lets homesteaders take their Save Our Homes benefits with them when they move.
The plaintiffs want the court to strike down Save Our Homes and the portability provision. They also are seeking tax refunds for themselves and other recent home buyers.
A state judge in Tallahassee last year dismissed a similar lawsuit by out-of-state owners of second homes in Florida challenging Save Our Homes on similar grounds. An appeal of that decision is pending.
Before portability, when people sold one home and bought another, they were taxed the same as any other new home buyer.
"Now you're in a situation where people who have Save Our Homes due to portability have a permanent benefit over nonresidents" who purchase homes in Florida, Simmons told the Taxation and Budget Reform Commission on Wednesday.
The plaintiffs allege that it violates people's right to travel under the U.S. Constitution.
Simmons said the Legislature or tax commission could remedy the situation by drafting another constitutional amendment that would provide a percentage exemption for all homeowners, new and old.
The commission's Finance and Tax Committee on Feb. 25 will consider a proposal for a 25 percent exemption that would let homeowners to keep their Save Our Homes benefits if that is a better deal for them.
It also would apply the exemption to other residential property, including second homes and rentals, and raise the state sales tax by 1 percentage point for three years to partly offset revenue losses to local governments and school districts.
Simmons began pushing a percentage-based exemption last year and it was part of a proposed state constitutional amendment offered by the Legislature.
It would have given homeowners a one-time choice of keeping Save Our Homes benefits or taking the percentage-based "super exemption."
A judge removed it from the ballot because the proposal's summary was misleading but found nothing wrong with its substance.
The Legislature nevertheless abandoned that proposal and offered Amendment 1.
Last modified: Friday, Feb. 15, 2008 at 3:53 a.m.
Matt Puckett
Deputy Executive Director
Florida Police Benevolent Association