Senate Unveils Plan To Reduce Property Taxes

The state Senate on Thursday unveiled a plan to lop $11 billion off local property tax bills in the next five years with a rollback of rates and a complicated exemption schedule that would require no increase in the state sales tax. The Senate strategy is more modest than a House plan that eventually could eliminate all property taxes in exchange for a boost in state sales taxes. The bipartisan Senate proposal would roll back local tax rates to 2005-06 levels, adjusted for growth in population and income, which would provide an immediate 6.5 percent savings to the average taxpayer. The House plan rolls back rates to 2000-01 levels, which translates to about a 20 percent discount. The Senate plan then would freeze taxes at that rate for one year, then cap revenues so they could not rise faster than population and income growth. The plan takes a complicated tack when it comes to the homestead exemption and Save Our Homes benefit. It would double the homestead exemption from the current $25,000 for first-time buyers of homes under $100,000. Homeowners would maintain their Save Our Homes benefit - which caps the increase in taxable value of a home at 3 percent a year - when they move. That new taxable value, however, then would grow at 10 percent per year until it reached its truer taxable value, when the 3 percent cap would kick back in.

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