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Daily Briefing for Real Estate

May 29th, 2007 9:49 PM by Ron Mastrodonato

Business interests caution Crist on property tax relief

TALLAHASSEE, Fla. (AP) – May 16, 2007 – Leaders of business groups and their lobbyists cautioned Gov. Charlie Crist on Tuesday against shifting more of the tax burden their way in his drive to slash property taxes.

They voiced support for property tax cuts but were worried other taxes or fees would be increased to make up for losses.

Associated Industries of Florida President Barney Bishop also told Crist the cuts shouldn’t be so deep that they harm the ability of cities and counties to provide vital services.

“It’s popular right now to beat up on local government and say they’re the bad guys on the spending,” Bishop said. “I’ve got to tell you, as far as we’re concerned – the feds, the state, local – everybody shares a lot of the blame.”

Crist met with banking, construction, industrial, real estate, retail, hotel-restaurant and chamber of commerce representatives in the Capitol as part of his push for substantial property tax relief.

Lawmakers again will take up the issue in special session June 12 after failing to reach an agreement during their regular session, which ended May 4.

Homebuilders told Crist they were afraid local governments would adopt or increase impact fees on new homes while restaurateurs and hoteliers feared the state might increase taxes on the hospitality industry to make up for property tax cuts.

Many businesses opposed a Republican-sponsored House proposal that would have increased the 6 percent statewide sales tax to as much as 8.5 percent in exchange for slashing or possibly eliminating property tax on primary homes, known as homesteads.

The proposal also drew opposition from the Senate, most House Democrats and Crist. They instead favor rolling back taxes and then capping them with allowances for growth and inflation. There’s been no consensus, though, on how far back they should be rolled.

House Speaker Marco Rubio, R-West Miami, now is pushing another plan that would offer varying exemptions for homes and businesses alike based on percentages of each property’s value. Only primary homes, known as homesteads, now get an exemption – a flat $25,000 regardless of value.

Crist praised Rubio for offering the new proposal.

“Without that move it would have been very difficult to come in here June 12th,” Crist said after the meeting. “But with that move I’m enormously confident.”

Florida Retail Federation President Randy Miller told Crist, who refers to citizens as “the boss,” that homeowners abandoned their role as tax watchdogs. That’s because the existing Save Our Homes Amendment already caps their annual assessment increases at 3 percent.

“The boss was not looking,” Miller said. “We’ve got to put the voters back in charge.”

That could be done by giving bigger tax cuts to non-homestead properties, but Crist later said he still is committed to substantial relief for all taxpayers including homeowners.

Others, though, told Crist taxes were contributing to high housing costs that have made it difficult to find employees.

Florida Restaurant and Lodging Association President Carol Dover said a longtime Key West restaurateur moved from the island city because he couldn’t afford to pay employees enough to afford housing.

“Some hoteliers are actually giving up hotel room for employees to live on property,” Dover said.

Copyright © 2007 The Associated Press, Bill Kaczor, Associated Press Writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
 
 
Consumers, lawmakers meet with Citizens reps

FORT LAUDERDALE, Fla. – May 16, 2007 – Some came for information; some came to vent.

In all, more than 160 consumers, including a state senator and two representatives, attended a meeting with top officials from Citizens Property Insurance, the state-run insurance company in Fort Lauderdale on Tuesday afternoon.

Citizens ranks as the largest insurer of houses, condos, apartments and mobile homes in Florida with nearly 1.3 million policies on its books. This was the first of four meetings the insurer plans to hold around the state with consumers.

Irma Kelly, who lives in a mobile-home park in Hollywood, railed about rate increases. Her policy, which moved to Citizens this year, has jumped to $1,200 from about $800, and she’s buying less coverage.

For Kelly and her husband, who live on a fixed pension, the increase was huge. After 17 years in Florida, the Brooklyn native is considering a move back north. “This is not a state for seniors anymore,” Kelly said.

Others like Lee Gorodetsky, an independent insurance agent in Fort Lauderdale, came to see how Citizens could streamline his workload.

Having had to write entirely new policies for about 4,500 clients who had been covered by the Poe Financial Group companies that failed last summer, Gorodetsky had hoped Citizens would allow agents to transfer the existing policies to the company. Despite earning more commission, the workload was huge.

“It was good that Citizens officials get out and listen to policyholders,” said Sen. Jeff Atwater, R-North Palm Beach. “It’s important if Citizens wants to achieve high quality customer service.”

Atwater said he still fields 15 to 20 calls a week from homeowners worried about how they will pay for skyrocketing insurance premiums.

Lawmakers attend

Rep. Franklin Sands, D-Weston, and Rep. Elaine Schwartz, D-Hollywood, were also at the Citizens meeting. Former Rep. Ron Silver was also there.

Facing the crowd were Citizens’ top officials, including Bruce Douglas, chairman of the company’s board of governors; Susanne Murphy, Citizens’ executive vice president; and Paul Palumbo, the company’s senior vice president in charge of underwriting.

In all, Citizens had a team of about a dozen at the meeting. The company also helped about 35 consumers with individual insurance questions and problems. Citizens also used the opportunity to explain some changes stemming from the regular and special legislative sessions this year.

“The enemy is not Citizens,” Douglas told the crowd. “The enemy is the hurricanes.”

Analysis released

Ironically, the Citizens meeting in South Florida took place as an insurance industry group released an economic impact analysis of the changes brought about in the state’s insurance market by laws passed during a special session in January and the regular session earlier this month.

Many of the provisions in these two laws will affect Citizens, including freezing the firm’s rates this year and next and allowing it to expand its operations.

The study pointed out that these new laws will bring about some rate savings from some Floridians by transferring the risk – if Citizens faces a deficit and by providing extra capacity for the Florida Hurricane Catastrophe fund – to all the consumers in the state. All policies, including auto and homeowners, will be assessed if Citizens or the CAT fund has a shortfall.

“The new law may drive away some private insurance companies that would otherwise want to conduct business in Florida,” said Nancy Watkins, principal for Milliman and co-author of the study for the Property Casualty Insurers Association of America.

Copyright © 2007 The Miami Herald, Beatrice E. Garcia. Distributed by McClatchy-Tribune Information Services.
 
 
 
Posted in:General
Posted by Ron Mastrodonato on May 29th, 2007 9:49 PM

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