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Posted at 6:18 PM, Jun. 17, 2007
Property Tax Relief Approved
Last week I wrote about how the House and Senate came to an agreement on Property Tax Relief.
Then over the weekend most of the Democrats and some Republicans decided they did not like the agreement anymore. This was after much lobbying over the weekend. Property Tax Relief looked dead.
Then just a couple days later Property Tax Relief passed. Politicians seem to change their minds daily.
There are two types of Property Tax Relief in this bill. The first (Statutory Changes) are a definite, while the second (Constitutional Amendment) has to be approved by a 60% majority in January of 2008. The following is an overview of each.
Immediate (this year) tax relief in the amount of $15.6 billion (Statutory Changes)
- All cities and counties must cut taxes for the 2007-2008 fiscal year back to 2006-2007 revenue levels.
- All local governments will also be required to cut an additional 3%, 5%, 7% or 9%, based on a formula of tax performance over the past five years, compared to state average.
- Future property tax revenues capped to the rate of personal income growth and new construction.
$16 billion in further property tax relief (Constitutional Amendment)
- An average savings with both the statutory and constitutional changes for homesteaded property of $1,300 or a 44% reduction
- “Save our Homes” to be replaced with a super exemption that will give a bigger benefit in approximately 73% of the cases. Where it does not the homeowners present Save our Homes will be grandfathered.
- For homesteaded properties there will be an exemption of 75% of the first $200,000 in value of the home. Therefore, on a $200,000 home the exemption would be $150,000 and the property tax would be based on a value of $50,000.
- On the next $300,000 of home value for homesteaded property, there will be an additional 15% exemption.
On January 29, 2008 the Constitutional Amendment will be placed on the Presidential primary election.
Expect much lobbying on both sides of the issue.
Those against the property tax relief believe that it will result in cuts to essential services, such as law enforcement and fire services, along with fewer parks, libraries and many other cuts.
Those for property tax relief will argue that tax revenues have increased approximately 99% over the past five years, and the taxpayer should be able to get some relief. Yes some services may need to be cut, but with record revenues the local governments should be able to do with less.
What do you think?
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