It's a perfect storm: Home insurance rates are too high. Property taxes are too high. The citizenry wants relief. The politicians in Tallahassee want to give it to them.

Last month, in a special session, the Florida Legislature dealt with the insurance crisis. Lawmakers responded with a plan they say will cut insurance premiums by an average of 22 percent, though critics say it puts homeowners at risk if disaster strikes.

Up next: Tax cuts. Specifically, property-tax cuts. And while these cuts will be mandated from Tallahassee, they won't affect the state's budget, which is largely funded by sales taxes. Local governments, however, rely on property taxes for their revenue. Property taxes pay for cops, parks, paramedics and, in part, schools. But the people want tax cuts. Tallahassee politicians will deliver them, probably with a slate of tax-cutting constitutional amendments, and the populace will approve them overwhelmingly.

Then all hell will break loose.

Or, in Orange County spokesman Steve Triggs' words, "That would suck, man."

There are a half-dozen tax-reform bills making their way through the Legislature. In some form, two of the proposals are almost certain to become law: The first would double the state's existing homestead exemption to $50,000; in other words, you'd deduct $50,000 — not $25,000 — from your home's assessed value. The second would make the state's Save Our Homes initiative — which caps increases in homesteaded properties' assessed values at 3 percent per year — portable, meaning you could transfer the savings you earn on one house to another house elsewhere in the state.

Local officials are certain some form of Save Our Homes portability will pass, but there are competing versions. On Jan. 30, Orange County property appraiser Bill Donegan pitched his to county officials and asked them to donate their lobbyists to his cause.

"This has become a cowboy shootout," Donegan says. "Everybody's got a plan. Nobody's really thinking about how to administer the plan or how it will work or what will be the impacts."

Then there's the legislative kicker: a proposal to limit the amount of money local governments could take in or spend every year. Orange County hasn't raised its property-tax rate in 18 years. But its budget has grown exponentially, thanks to rampant growth and a surge in assessed home values. The county hasn't technically raised taxes, but it's still collecting more. That's the "problem" the revenue cap would fix. If local governments were forbidden from collecting the extra money, they'd have to cut property-tax rates.

If all three pieces of legislation were enacted together — perhaps bundled as one omnibus constitutional amendment — it would hit local government hard. And it goes without saying that big projects, such as Orlando's $1 billion-plus planned downtown renovation, would be in serious jeopardy.

How bad would it get? Statewide, if the combined increased homestead exemption and Save Our Homes portability had been enacted in 1996, it would have cost local governments $513 billion over the last decade, according to Orange County calculations.

The homestead exemption, passed in 1980, removes the first $25,000 of a home's assessed value from the tax collector's sights. In other words, if your house is worth $100,000, property taxes will only apply to $75,000. But the tax-cutters want to go further. They want to double the exemption.

The doubled homestead ex-emption, which Gov. Charlie Crist has endorsed, will cost Orange County $200 million over the next five years. Orange County has already done its math on where the cuts would occur: $30 million of it, for example, would come from the sheriff's office, and another $36 million would come from the fire department.

Still, Orange County has a broad-enough tax base and wealthy-enough communities to absorb the hit. Smaller, poorer cities and counties don't.

Eatonville, for instance, would probably go bankrupt. It's a poor town, and its houses don't have high assessed values. If the first $50,000 of a house were exempt from taxes, 34 percent of the town's properties would be off the tax rolls, says Donegan.

"Eatonville in itself would be devastated," says county manager Randy Singh. Most of the remaining homes would only pay taxes on $5,000 or $10,000 — the difference between the homes' worth and the exemption. "If they can't afford to exist as a town, the county may need to take it over."

In 1994, voters approved the Save Our Homes amendment, which forbade property appraisers from raising homesteaded property values more than 3 percent per year. As property values rose, some people who had owned their homes for decades couldn't afford the taxes. This amendment was the remedy. But it is problematic. If you move, the savings you've accumulated on one home aren't passed on to the next, which has led to calls for "portability," or the ability to transfer your savings between moves inside the state.

There are lots of competing plans. The worst-case scenario for the county — allowing people to transfer all of their Save Our Homes savings to a new residence — would cost $79 million over the next five years. One proposal allows you to transfer up to $400,000 in savings; another, backed by Donegan, caps the savings at the median home price of the county to which you relocate. In Orange County, that would be $192,000. He thinks his plan would spare local governments serious pain. Orange County commissioners gave their tacit endorsement Jan. 30.

The idea to cap government revenues comes from the Republicans' 100 Innovative Ideas for Florida's Future, a book outlining new House Speaker Marco Rubio's agenda. Included are recommendations that would cap property taxes. The cap is also supported by Florida Tax Watch and the James Madison Institute, both conservative organizations.

If local governments were forbidden from growing beyond a proposed formula that encapsulates population growth and inflation, Orange County alone would have lost $196 million in 2006. In the next five years, it would lose $497 million.

That's a lot of money. And there are other factors to consider as well. What if the a proposal restricted tourist-tax growth or the growth of Community Redevelopment Areas? The proposed arena, performing arts center and renovated Citrus Bowl are all tied into that money stream. If it's locked up, paying off the massive debts the city and county will incur would be extremely difficult. Even Orange County Mayor Rich Crotty's Invest in Orange County, our Children's Legacy program — which financed $40 million worth of bonds to pay for $500 million worth of environmental protection, transportation initiatives and Burnham Institute incentives — might become unsustainable.

If all three proposals were passed at once, Orange County would lose $776 million over the next five years. When you consider that since 1996, the sheriff's budget has increased 88 percent, the fire department's budget has increased 215 percent and county workers' health-insurance costs have increased 257 percent, according to county stats, that's a painful hit, even to a government with a $3.6 billion annual budget.

Both Save Our Homes and the increased homestead exemption have Crist's backing and will probably become law by the end of 2008, if not sooner. (There are some questions about the Save Our Homes portability proposal. It may be found unconstitutional and never see a ballot.) The revenue cap is a harder sell, but county officials believe if it gets on a ballot as a proposed constitutional amendment, it will pass.

Why? Everyone wants tax cuts. But no one wants to think about what they really mean.

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