Proposals that cut property taxes for seniors have biggest impact
Legislators weigh measures to help low-income seniors
October 18, 2007
Broward County could reap the biggest impact in Florida from proposals to cut — or even abolish — property taxes for low-income seniors, according to the state Department of Revenue.
The tax exemptions, the details of which remain in flux as legislators in Tallahassee debate their merits, could mean big savings for many of South Florida's elderly, but major problems for schools and local governments that could lose millions of dollars.
Lill Roberts, a Coconut Creek resident who is in her 70s, said the tax break is badly needed, given the rising cost of living.
"How do I sign up for that?" she said after hearing of it. "I think it's an excellent idea … not only for me, but for people I know."
On the other hand, Sophie Bock, 82, of Pembroke Pines, doesn't support the idea. She's worried about what services she would lose in exchange for not having to pay $300 a year in taxes on her two-bedroom condo in Century Village.
"Where's the money going to come from for our schools? Where's the money going to come from for health care … and nursing homes?" she said.
There are three versions of the proposal. The original, from House Republicans, would abolish all property taxes for anyone 65 or older with a homestead exemption and a total household income of about $24,000 or less.
(Many low-income seniors already receive an extra $25,000 homestead exemption — including roughly 30,000 households in Broward, 14,000 in Palm Beach County and 46,000 in Miami-Dade.)
There is one controversial ingredient in House Republicans' plan: It would impose no limit on how much seniors could have in assets, including their homes. As a result, assert Democrats, it would be ripe for fraud and abuse, and would spur well-to-do seniors to cache their wealth in trust funds so their incomes plummeted.
"There's going to be a seminar held at the Embassy Suites: Come and learn how you can avoid paying property taxes," predicted Rep. Jack Seiler, D-Wilton Manors.
To close the loophole, an alternate tax-break plan for seniors emerged this week in the Senate. Yet a third proposal, which would not cut money for schools, was suggested by House Democrats on Wednesday.
Instead of wiping out property taxes for the poorest seniors, the Senate plan would grant them a $100,000 homestead exemption. House Democrats would allow them an exemption equal to the county's median value home. That would be a $260,000 exemption in Broward.
Under the formula proposed by House Republicans, local governments and schools statewide would have to find ways to make up for the loss of an estimated $629 million in property taxes now paid by poor seniors yearly.
South Florida would be the most affected because of its large number of elderly, according to the state Department of Revenue. By its estimates, Broward County would be home to the greatest number of seniors eligible for the tax break (about 10 percent of the statewide total), followed closely by Miami-Dade (about 9.5 percent) and Palm Beach County (about 9 percent). Statewide, the number of seniors qualifying could be 500,000.
As a result, Broward could lose at least $26.5 million a year in tax revenue, including $14.8 million for schools, $6.5 million for county government and $5.1 million for cities. That's assuming the same number of seniors who currently get an extra senior homestead exemption would qualify for the total exemption, according to the Broward County Property Appraiser's Office. The actual number qualifying could be much higher.
Cities most affected would include Tamarac, Lazy Lake, Margate, Coconut Creek, Hallandale Beach and Lauderdale Lakes.
Hallandale Beach Mayor Joy Cooper said such cuts would force local elected officials into a corner — to either increase taxes for non-seniors or "drastically reduce our service level."
The Senate estimates its plan would cost schools about half what the House Republican version does. The cost of the House Democrats' senior exemption proposal has not been determined, but Democrats say that none of the money would come from school budgets.
In the end, ordinary Floridians will have the final say on whether to enact the property tax benefit for poor seniors as part of a larger tax-relief package. Assuming the House and Senate come to a compromise, 60 percent of those voting would have to approve the measure as part of a Jan. 29 referendum.
Staff Writers Linda Kleindienst and Josh Hafenbrack contributed to this report.