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Judge hears arguments in property tax amendment challenge

TALLAHASSEE, Fla. (AP) – May 30, 2008 – A lawsuit challenging a new constitutional amendment that lets homeowners take property tax breaks with them when they move should be dismissed, state and local government lawyers told a judge Thursday.

Three recent home buyers who migrated from other states contend in the suit that Amendment 1, which voters approved in January, violates their right to travel. That’s because the amendment’s “portability” provision exacerbates differences between their taxes compared to longtime Florida residents, who pay much less for homes of the same value.

The government lawyers argued that the U.S. Supreme Court in 1992 approved similar discrepancies that resulted from California’s Proposition 13. The justices found tax breaks for older residents served a rational purpose because they prevent rapid turnover in ownership that could destabilize neighborhoods.

“This is an anachronistic lawsuit,” said Scott Makar, a lawyer for the state Department of Revenue.

The federal justices, though, didn’t consider the travel rights question in the California case because they decided it on other issues, said William C. Owen, a lawyer for recent home buyers from Tallahassee, Port Charlotte and North Palm Beach.

“You can’t have second-class citizens based on residency,” Owen said.

Chief Circuit Judge Charles Francis questioned the travel rights argument. He pointed out that Floridians who may rent for years before buying a home are affected just as much as Owen’s clients by the tax discrepancies. Ruling in favor of the newcomers would give them more rights than those longtime citizens, Francis said.

“That’s a good point,” Owen acknowledged, but he said the portability provision still “flunks the rational basis test.”

Francis said he would rule as quickly as possible but declined to set a timetable.

Since 1995 the Florida Constitution’s Save Our Homes Amendment has limited annual assessment increases to the cost of living or 3 percent, whichever is lower, for owners of primary homes, or homesteads. That has meant widely differing tax bills depending on how long someone has owned a home.

Another Tallahassee judge last year dismissed a lawsuit challenging Save Our Homes. It was filed by three Alabama residents who own vacation homes in Destin and do not qualify for the benefits. An appeal of that ruling is pending.

Many homeowners also said they felt trapped by Save Our Homes because they’d lose their accrued benefits if they moved. The portability provision in Amendment 1 is a response to that complaint. It lets those homesteaders transfer at least a portion of those benefits to a new home.

Source: ap.org