Seniors Get a (Bigger) (Unfunded) Tax Break

Earlier today, Governor Bill Crist signed into law a bill increasing the allowable local property tax homestead exemption for fixed-income seniors from $25,000 to $50,000. In 2007, "fixed-income" means just over $24,000 a year.

On its face, this is a terrific and bold move by the legislature and the governor. Floridians should absolutely be concerned about sheltering seniors from excessive property taxes, and fixed-income seniors in particular. And this homestead exemption seems like a fine way to do it.

But it's not that bold a move, and here's why:

(1) Florida voters already decided that they like this idea, overwhelmingly supporting a ballot initiative allowing counties this option last fall.
(2) The new homestead exemption is optional, and is an option to be exercised by county governments-- not the state. In fact, as the House of Representatives' fiscal note on the bill notes, it won't cost the state a dime.

That doesn't mean it's free, of course. The same fiscal note adds:

However, if every jurisdiction adopted the exemption at $50,000 it was estimated that this would result in a $3.1 billion dollar loss in taxable value.

And that loss in taxable value would have to be made up by the counties-- not the state.

So it's great that the state is giving counties more options. And this particular option is quite well targeted to the folks who need the most relief. But this is a politically cost-free call for state lawmakers.

As he signed the bill, Governor Crist noted,"We have an obligation to provide our state's seniors the utmost respect and dignity." Very convenient for him that the state doesn't have an "obligation" to spend a dime paying for it....