An election-year tax break for Florida homeowners that cities and counties say would hurt basic services emerged as the key to a budget deal in the Legislature on Friday.
As the session heads into its final days, the Senate urgently moved forward with a dormant proposal to increase the homestead exemption from $50,000 to $75,000, subject to what’s viewed as certain voter approval in 2018.
That means lower taxes for homeowners at a time when they are steadily rising because of surging home values.
The Republican-backed measure would be on the 2018 ballot when Floridians will elect a new governor and a U.S. senator, all 120 state House seats and half of the 40 Senate seats. Sixty percent of voters have to approve.
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Miami-Dade, Broward, Pinellas, Hillsborough and other counties warn of dire fiscal consequences including employee layoffs, with higher tax rates for businesses, snowbirds and renters. And they say it will worsen an uneven property tax system that favors people who own the same home for a long time.
House Speaker Richard Corcoran, a Land O’Lakes Republican, has made the tax break a centerpiece of his agenda as he weighs a run for governor next year.
The House passed the exemption Wednesday, 81 to 35.
The Senate showed little interest until Friday, a day after Senate President Joe Negron and Corcoran agreed in private to take up each other’s priorities as a condition to a budget deal.
We’re evaluating. It blows the entire session up, because this is a trade with Corcoran. If we take that step the budget stops and the session stops.
Jeff Clemens, D-Lake Worth, the Senate’s incoming Democratic leader
Corcoran is so intent on having the Senate pass the tax break that he adjourned the House on Friday until Tuesday, telling members to stay home Monday when the Senate is expected to vote on it.
“Everything hinges on the homestead exemption,” said Rep. Joe Abruzzo, D-West Palm Beach.
Despite intense opposition from cities, counties and fire chiefs, the Senate Rules Committee passed the property tax break on a 9 to 2 vote, setting up a floor vote early next week.
“We would just ask you not to abdicate your responsibility,” Florida Association of Counties lobbyist Laura Youmans told senators.
The political drama around the tax break intensified as all 15 Senate Democrats considered voting as a bloc against the proposal.
If that happens, the bill (HJR 7105) will die because a proposed constitutional amendment needs 24 votes to pass the Senate.
The Senate has 23 Republicans, with one absent due to illness and one seat vacant after last week’s resignation of Miami Republican Frank Artiles.
Republicans sounded certain of success, expecting one or more Democratic defectors.
“I think we’ll be good,” said Sen. Bill Galvano, R-Bradenton, a likely future Senate president and leading figure in the negotiations. “We wouldn’t have brought it up if we didn’t have the votes.”
$644 million is the estimated first-year impact on all 67 counties, more than 400 cities and more than 130 special districts
Sen. Jack Latvala, R-Clearwater, a long-standing champion of local government, was the only senator on the Rules Committee who did not vote. His sole opposition would doom the proposal if Senate Democrats remained united, but the Democratic caucus did not decide to vote as a bloc.
“We’re evaluating,” said Sen. Jeff Clemens, D-Lake Worth, the Senate’s incoming Democratic leader. “It blows the entire session up, because this is a trade with Corcoran. If we take that step the budget stops and the session stops.”
Sen. Jose Javier Rodriquez, D-Miami, who voted for a version of the homestead exemption in a committee, said the impact varies from county to county — with areas of lower property values hit the greatest and the number of homeowners helped the fewest.
“It’s a tax shift in my district, but it’s hard not to sympathize with homeowners where the real estate is booming and they are stuck,” Rodriguez said.
Opposition from Tampa and St. Petersburg mayors Bob Buckhorn and Rick Kriseman helped convince Sen. Darryl Rouson, D-St. Petersburg, to oppose the break.
“It would be devastating to the Tampa Bay area,” Rouson said.
The Senate sponsor of the tax break, Sen. Tom Lee, R-Thonotosassa, called it “a broad-based tax cut directed at the middle class.”
He amended his bill so that owners of homes valued below $100,000 would not get the additional property tax break.
Before Lee’s amendment, counties estimated the loss of revenue in the first year would be $85 million in Miami-Dade, $87 million in Broward, $45 million in Pinellas and $50 million in Hillsborough.
The Legislature would allocate $11 million starting in 2019 to shield the 30 smallest counties in the state from losing any more property taxes.
Lee said the first-year impact on all 67 counties, more than 400 cities and more than 130 special districts is $644 million.
“My constituents will vote 75 percent for this,” said Lee, who represents most of eastern Hillsborough.
Contact Steve Bousquet at email@example.com. Follow @stevebousquet.