State panel proposes $9 billion tax cut -- from schools

Article Courtesy of The Sun Sentinel

By Aaron Deslatte

Published March 18, 2008


TALLAHASSEE - Florida voters are poised to get a second, beefier bite at property tax cuts this year.

The state Taxation and Budget Reform Commission voted 21-4 Monday to ask Floridians to decide whether they want to eliminate a $9-billion-plus slice of property taxes for schools by 2011.

Voters will also be given the option of increasing the sales tax by a penny, which would shift the burden of paying for schools from property owners to nearly all, including tourists, who buy goods and services.

If voters approve the plan in November, it would be the most dramatic restructuring of Florida's tax system to come out of the past two years of Capitol debate.

Politicians who have sparred over taxes appeared caught off guard by the speed in which the normally deliberative tax panel acted. The tax board is authorized every 20 years to place proposals on the ballot.

Gov. Charlie Crist confessed little knowledge of the details and said he hadn't seen any polling on whether it stood a good chance of passage.

"Let's see if that happens," the governor told reporters. "I don't know whether it will or it won't."

But House Speaker Marco Rubio, R- West Miami, praised it as a change that could make waves nationally.

"It's going to send a powerful message around the country if it passes, that this is a place you can come and work, and own, and live and invest," he said.

Two months ago, voters overwhelmingly passed a more modest tax cut that expanded the homestead exemption and let homeowners take their Save Our Homes discounts with them when they move.

The tax commission's amendment dwarfs that plan.

It would remove taxes for homesteaders, second-home owners and businesses equally eliminating somewhere between one-fourth and one-third of property taxes statewide.

In Palm Beach and Broward counties, the property tax money for schools accounts for roughly 35 percent of the total tax bills on property, according to Rubio and tax commission member Jim Scott.

Legislators "for years have put that burden back on property taxes, but this will reverse that trend. It'll mean that people can afford their homes again," said Scott, also a former Broward County commissioner and Senate president.

The amendment gives them the option of raising Florida's current 6-cent sales tax by a penny. That would generate between $3.3 billion and $3.9 billion statewide annually. It would still leave the state needing about $4 billion, which could come from cutting spending and adding revenues resulting from economic growth the sponsors predict the property tax cut will generate.

An array of business groups, unions and advocates for the poor lined up Monday to criticize the proposal and argue the Legislature should be the body to decide whether to place tax policy changes before voters.

Mike McCarron, executive director of the Florida Catholic Conference, said his organization was worried that "those with insufficient incomes will not realize the same benefit" as property owners.

Palm Beach County School District administrators said Monday they are concerned about the commission's proposal.

"The real issue at hand for education is that sales tax is so volatile," Chief Operating Officer Joseph Moore said. "You can't ramp up education and ramp down education based on the economy."

The school district this year has so far experienced two state funding reductions totaling more than $30 million, due to declining state revenues.

"It can't be well received," Moore said, predicting the reaction from school leaders across the state.

Broward School Superintendent Jim Notter said the measure requires careful analysis.

"I think anything that could be a long-term solution ... needs to be put under a microscope and examined thoroughly," Notter said.

Jeanne Jusevic, parent activist with two children in Monarch High School in Coconut Creek, called the latest attempt at property tax relief "irresponsible."