'Highest and Best

'Highest and best use' delayed until next year

St. Petersburg Times, 6/7/2007

House Speaker Marco Rubio had bad news for small businesses Wednesday, saying plans to limit a taxing practice that can give huge tax bills to modest businesses in prime locations would be put off until next year.

"I want to be frank with you guys," the Miami Republican said during a conference call with the Florida Association of Realtors. "I don't want to mislead you into thinking there's some kind of agreement on that right now. There just isn't."

News that the "highest and best use" issue wouldn't be addressed came as a surprise because there had been wide agreement on the matter during the regular session.

"Highest and best use" is one of several tools property appraisers have in determining taxable value. It is a market-based approach that sets land value based upon what a piece of property could potentially become -- its highest and best use -- not what it currently is used for.

Because of that, a small hotel on the beach can be taxed as though it were a high-rise condominium. Or a used-car lot can be taxed as though it were a retail center.

Katrena Hale-Claver, owner of Sand Glo Villas on Indian Shores, said her taxes went up $20,000 in November and now approach $60,000. She said a property appraiser told her she should knock down the villas and build condos. The prospect of waiting longer for relief troubles her.

"There's a lot of mom-and-pop hotels that might not be able to hold on for another year," she said.

There was widespread agreement during the regular session that the practice needs to be revamped, if not eliminated.

But Rubio said Wednesday that getting the details right has been difficult and there is no way, yet, to predict how much a change would save property owners, or how much it would cost local governments in tax revenue.

In talking with real estate agents, who are eager for the broader tax package to be approved because it will help business, Rubio said the financial impacts could be announced as early as today.

A growing chorus of critics say the lack of information has made it impossible to evaluate the plan announced Friday by Rubio and Senate President Ken Pruitt. The plan includes a rollback and cap of local government tax revenue and large homestead exemptions.