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Despite Amendment 1, Floridians are still trapped in their homes

TALLAHASSEE — Gov. Charlie Crist and a throng of supporters packed the lawn of Keith and Elizabeth Markowitz's Orlando home to launch the Amendment 1 property tax campaign last year with a promise: If the referendum passed, they would no longer be "trapped in their homes."

A year later, the amendment has overwhelmingly passed, and the Markowitzes are still trapped — now, by the plunging real estate market.

"We are still anxious to move, but we haven't sold our house," said Keith Markowitz, who took his house off the market after 16 months. "I've got too many foreclosures around me."

He had hoped to sell the three-bedroom home, use the tax savings from the new law to move to the Panhandle, where they would build a more energy-efficient house. But as they've waited for the market to return, their property value has dropped from $300,000 in 2007 to $230,000 last year.

The Markowitzes are among the families featured in the governor's $1 million Amendment 1 campaign who are still waiting to feel the full benefit of the reforms. Crist's promise that Amendment 1 would cause taxes to "drop like a rock," and save taxpayers $1.2 billion in the first year now pales in comparison to the larger casualties of the dysfunctional real estate market — with a $100 billion decline in Florida property values last year, according to the Department of Revenue.

Amendment 1 hit "right in the worst part of the correction in the housing boom, so you couldn't expect to see what impact it could have," said Amy Baker, director of the Legislature's Office of Economic and Demographic Research. "In three years, we may see the results more clearly."

Although the amendment was designed to repair the damage the housing boom had on home­owners' tax bills, "it was almost too little too late," said Ed Wilburn, managing director of residential lending at Great Florida Bank in Coral Gables. "It didn't slow the crisis from forming."

The centerpiece of the amendment was portability, the ability for homeowners to transfer from one home to another up to $500,000 in property tax benefits accrued from the Save Our Homes Act. Save Our Homes caps the increase in a home's assessed value at 3 percent a year, regardless of the increase in market value, substantially lowering tax bills. As home values soared, homeowners were afraid to move and lose the tax break.

Expecting Amendment 1 to release homeowners from that fear and trigger sales of long-held homes, revenue estimators predicted that in the first year, homeowners would transfer $112 billion in tax savings from one home to another.

But the converging forces of the worldwide credit crunch, the explosion of home foreclosures and the resulting surplus of homes had a chilling effect. By the end of 2008, 39,000 homeowners transferred only $3.1 billion worth of tax savings to new homes, according to revenue department reports.

"We never thought it was going to do a whole lot to spur homes sales," said Kurt Wenner, a researcher with Florida TaxWatch, a business-backed tax research group that opposed the amendment because it perpetuated a system that shifts more of the burden to businesses and commercial property.

But Pinellas County Property Appraiser Pam Dubov says it's also too early to call portability a failure. "The problem is, people can't sell their home to be able to move," she said. "Whether it is effective in getting the real estate market going isn't going to be known until we get this glut of foreclosures off the market."

Teresa and Anselmo Bonilla of Hollywood hosted a press conference with the governor in January 2008. They were counting on portability to help them move to a smaller house, take their tax savings with them and save $1,400 on their annual tax bill.

But with the drop in market value, and other changes from law, the property's tax bill dropped — by $288.

For those who bought a home in 2004 or 2005, Broward County Property Appraiser Lori Parrish said, "your portability is basically zero — depending on what area you're in."

The greatest benefits of Amendment 1 came from an additional $25,000 homestead exemption applied to any home valued over $75,000, except for the portion of the tax bill that pays for schools, said Dubov of Pinellas County.

According to state revenue records, the expanded homestead exemption took $93 billion in taxable value off the rolls in Florida in 2008. In Pinellas County, it was $5.1 billion, in Hills­borough $5.7 billion and in Pasco $2.4 billion.

Now, Crist is preparing to ask the Legislature to modify the property tax system a bit more.

According to legislators who have been briefed by the Governor's Office, Crist is considering giving owners of second homes, investment property and commercial real estate in Florida a 5 percent tax cap similar to the one imposed on residential property by Save Our Homes. Amendment 1 capped their tax increases at 10 percent, which has had virtually no impact on tax bills.

Crist is also pushing legislation to prohibit property appraisers from collecting more in property taxes when a home's market value drops, a measure revenue estimators said Friday would cost the state and local governments $35 million in lost taxes in the first full year.

Times staff writer Steve Bousquet contributed to this report. Mary Ellen Klas can be reached at

Despite Amendment 1, Floridians are still trapped in their homes 02/07/09 [Last modified: Monday, February 9, 2009 10:55am]
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