Courtesy of The Miami Herald
November 23, 2015
When Gov. Rick Scott rolls out his budget proposal
Monday, he’ll talk about spending more money on schools, but some fellow
Republicans say he’s not telling taxpayers the whole truth.
A spike in school spending will have to come from higher property taxes on
businesses and homeowners in Florida, and that has Republican lawmakers
demanding the full story be told.
“This has got to stop,” says Republican Rep. Fred Costello of Ormond Beach.
Costello has decided it’s time to force Scott and lawmakers to advertise
that higher property taxes are paying for higher school spending, and that
much of the increase would be shouldered by the same small businesses Scott
says he’s trying to help.
Costello, who was mayor of Ormond Beach for eight years, wants any
state-imposed property tax increase to be spelled out with a “clear and
concise explanation” in quarter-page newspaper ads in 18-point type, just as
cities and counties must do when they publish the new tax rate each year.
The ad would have to include the “rolled-back rate,” or the property tax
rate that would have produced the same level of tax revenue as last year, to
reveal a tax increase.
“It’s going to force us to say we’re raising taxes,” Costello said. “Nobody
in Tallahassee wants to do that.”
Scott’s office sees it very differently.
“Rising home values are good for the economy and homeowners. This bill seems
to ignore that reality,” spokeswoman Jackie Schutz said.
As Florida’s economy improves, the taxable values of homes and businesses go
up. But what politicians don’t talk about is that higher property values
result in higher property taxes — even if the tax rate doesn’t go up. Every
year, the governor and legislators pass a budget that requires school boards
to impose a local property tax, known as required local effort.
Scott’s appointees on the Board of Education support a proposed budget that
would increase required local effort next year by $426 million, which is the
lion’s share of the board’s proposed $476 million increase in K-12 spending
— an idea that one key senator calls dead on arrival.
Sen. Don Gaetz, R-Niceville, chairman of the Senate budget subcommittee for
education, says he likes the concept and will consider filing the Senate
version of Costello’s House proposal (HB 751).
“I cannot support a budget proposal that would place 80 percent of the
burden of increased school taxes onto local property taxes and local school
boards. I don’t think that’s right,” Gaetz said.
Gaetz offered two alternatives. He said the state should put more sales tax
revenue into schools, which would jeopardize Scott’s tax cuts, or reduce
school spending and wipe out one of Scott’s top priorities.
“As legislators, when we functionally require a tax increase, we ought to
own it, because when we functionally cut taxes, we’re the first to take
credit for it,” Gaetz said. “You live by the tax cut; you die by the tax
Gaetz noted the irony of Scott’s emphasis on business-friendly tax cuts
while increasing property taxes on businesses, a topic he said is likely to
come up at Rotary Club speeches.
“They’re going to say, ‘Don, thanks for that tax cut. But now, let’s talk
about the tax increase that I’m getting,’ ” he said.
Gaetz, a former school board member and elected superintendent, asked Senate
budget analysts to find out how the Board of Education’s proposal would
affect homestead property (mostly homes) and non-homestead property (mostly
small businesses and vacation homes) in three specific Florida counties.
He chose Okaloosa, where he lives; Orange, the home county of Senate
President Andy Gardiner, R-Orlando; and Hillsborough, home of the Senate
budget chairman Tom Lee, R-Brandon.
The bottom line is that businesses would get hit harder than homeowners
Owners of non-homestead property in Hillsborough would be hit hardest, with
a property tax increase of $94.48 on average.
Orange County non-homestead property would be hit with an increase of $86.25
on average, and the spike in Okaloosa would be $52.82.
Homeowners in all three counties would pay about $11 more, in part because
the state Constitution’s Save Our Homes amendment caps annual increases in
the value of homestead property to 3 percent.
Costello, whose wife, Linda, is a member of the Volusia County School Board,
said he strongly supports spending more money on public education, but
taxpayers need to know exactly where it’s coming from.
Costello says he expects that his bill, entitled “An act relating to
transparency in state education funding,” will face an uphill fight.
“The governor is going to hate it,” Costello said.