Michael Peltier: Panel works to unravel property tax problem

TALLAHASSEE — Unable to reach agreement on expanding Save Our Homes protections for residents who sell their homes, lawmakers instead have decided to take a good, hard look at the popular yet increasingly controversial program that has kept billions off the tax rolls.

With the help of an executive order Gov. Jeb Bush signed last week, the committee will now take a look at not only Save Our Homes, but the entire property tax structure within the state.

"Save Our Homes has not prevented large increases in property tax assessments when existing homeowners relocate within Florida, potentially affecting homeowners' willingness to purchase a new home," Bush wrote in his order. "And statewide total property tax collections have far exceeded growth in total personal income."

The 15-member panel will come forth with a slate of preliminary recommendations by the end of the year. A full report will be due a year later. At a minimum, the group must look at the following issues: the consequences of current property tax exemptions and assessment differentials, and the appropriateness, affordability and economic consequences of property taxation levels in Florida.

The group must further examine alternative means of taxation including, but not limited to, split-rate and land value taxation; replacement alternatives to property taxation; and limitations upon local government revenue and expenditures.

The executive order calls on the panel to fashion a slate of recommendations taking into account a number of guiding principles. Any tax system should equitably treat similarly situated taxpayers and should be "fair, consistent and predictable." Further, the tax structure should be competitive with other states and not result in an increase or decrease in current tax levels.

The group's findings will dovetail with the upcoming work of the Taxation and Budget Reform Commission, which will be established in 2007 to look at the state's entire tax structure.

Begun in 1992, Save Our Homes was championed as a constitutional attempt to rein in property tax hikes by limiting the assessment increases to 3 percent at the most. Skyrocketing property values and land costs have resulted in a growing inequity in the tax bills of homesteads and non-homestead properties that do not qualify for Save Our Homes.

Secondly, homeowners wishing to relocate are now required to forego their Save Our Homes protections, a fact that is causing many to experience the sticker shock of paying taxes on current property values.

Attempts to provide homeowners with some way to take their Save Our Homes savings with them when they move met with strong opposition from local government groups and some lawmakers who say the current system is inequitable enough and should not be expanded.

Failing to come up with a compromise but under pressure to do something, lawmakers opted for a task force, which buys them time and allows member to take a long look at a complicated issue.