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Save Our Homes cap will bring property tax cheer to homeowners

The Save Our Homes cap will deliver more property tax relief in 2009 than at any time in the program's 15-year history.

That's welcome news for stressed homeowners, many of whom have seen their tax bills increase while the market has fallen. But it's yet another worry for local government leaders getting pounded by revenue declines.

"It's another straw on the back of the camel," said Pinellas County administrator Bob LaSala, who on Jan. 13 called for a contraction of county government as it faces a bleak economic horizon.

State law sets increases to the assessed value of homesteaded property at 3 percent or the consumer price index, whichever's lower. This year the index, a measure of the change in price for goods and services, rose 0.1 percent.

A previous mark of 1.6 percent was reached in 2002 and 1999, and the cap was set at that record low. In 2008, the index climbed 4.1 percent, so the cap rose to its 3 percent maximum.

Tim Wilmath, director of valuation for the Hillsborough County property appraiser, said the low cap, coupled with declining values, means most people should see their property tax bills fall or essentially stay flat.

"For the vast majority of homestead property owners, they will see a very similar tax bill in 2009 as they did in 2008," Wilmath said.

The picture would change, of course, if local elected leaders decide to raise tax rates later this year.

Tax bills are mailed in the fall. Officials won't have clarity on the number of homesteaded owners who could benefit from the low cap or declining values until this summer, when the tax roll is finalized.

Pinellas property appraiser Pam Dubov said this year's low cap will have only a modest impact on overall county revenue, resulting in a loss of less than 1 percent.

But, she said, it's new territory for those who have endured the "recapture rule," which allows governments to collect more taxes even when home values drop.

Here's how recapture works:

Say your capped home's market value is $300,000, but, after years of increases of 3 percent or less, its assessed value is only $200,000. The market value falls $50,000. Despite the decline, state law calls for your assessed value to increase in order to narrow the gap, meaning your tax bill goes up, too.

So you get a break only when your market value falls below your assessed value. Some state lawmakers are moving to get rid of the recapture rule, but at the moment it remains in place.

Last year, recapture would have increased the assessed value of the $200,000 home by $6,000. This year, with the cap at 0.1 percent, the increase would only be $200.

"It will almost be like there is no recapture provision," Dubov said.

While a break for homestead property owners, the low cap is another body blow to local governments that are seeing sales tax and service fee income crater even as they expect huge property tax revenue losses.

"It's like the perfect storm," said Hernando County budget director George Zoettlein.

Spying the clouds, local officials are concerned their governments will be severely diminished and unable to provide some basic services.

"Potholes filled, new books at the library — we can't afford to do government business as we've done in the past," Pasco County Commissioner Ann Hildebrand said. "It just isn't going to be there, it isn't going to happen."

Times staff writers Barbara Behrendt, David DeCamp and Bill Varian contributed to this report. Will Van Sant can be reached at or (727) 445-4166.

Save Our Homes cap will bring property tax cheer to homeowners 01/23/09 [Last modified: Friday, January 23, 2009 10:51pm]
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