House approves sweeping tax plan

Article Courtesy of The Orlando Sentinel

By Jason Garcia and John Kennedy
Published  April 19, 2007


TALLAHASSEE -- House Speaker Marco Rubio muscled his controversial plan to abolish property taxes on primary homes through the Florida House on Wednesday, setting up a late-session showdown with a Senate that so far has shown little interest in a package that also involves raising the sales tax.

The Senate is expected to begin debating a much different property-tax plan today.

With just two weeks remaining in the session, the two chambers remain so far apart that some in the Capitol are predicting lawmakers might have to return to cut a deal in overtime.

"I think we're too far apart right now," said Senate Minority Leader Steve Geller, D-Cooper City. "Some of these bills, we can't resolve at the last minute."

Rubio and House Republicans shrugged off such concerns in plowing ahead with the two-pronged package they have been aggressively promoting for weeks.

"I think now it all is coming to a head," said Rubio, R-West Miami.

The centerpiece of the House plan is a constitutional amendment that would, if voters approved in both statewide and individual county referendums, erase all property taxes on primary homes. But it also would add up to 2.5 cents to the sales tax.

Rubio and other House leaders said the measure would generate a net tax cut of about $7 billion -- by slashing $15.8 billion in property taxes while raising $8.9 billion in sales taxes -- and revolutionize homeownership in Florida.

"Know that you're fixing to make history by voting for the largest tax cut in history," House Budget Chairman Ray Sansom, R-Destin, told members moments before the final vote.

But Democrats complained that the plan would give homestead property owners a free ride on taxes at the expense of everyone else, particularly lower-income renters who they said would be hit especially hard by the sales-tax increase.

"We support progressive tax cuts. We don't support regressive tax increases," said House Minority Leader Dan Gelber, D-Miami Beach.

The proposed constitutional amendment was approved 78-40 -- six votes more than required to get the measure on the 2008 ballot, but far short of the 90 needed to call a special election this year.

Two Republicans voted against the plan -- Reps. Andy Gardiner of Orlando and Gayle Harrell of Stuart -- while a trio of Democrats voted for it.

"It's a tough vote. I'm very supportive of the property-tax reduction. . . . I just really struggled with us doing an additional tax on sales tax," said Gardiner, who is running for a Senate seat held by term-limited Sen. Daniel Webster, R-Winter Garden.

The other half of the House plan -- a bill that would immediately force cities and counties to roll back their property-tax collections to adjusted 2000-01 levels, cutting $6.3 billion overall -- breezed through the chamber on a unanimous vote.

That rollback is far deeper than one the Senate will take up today when it considers its own plan.

The Senate has suggested local governments be forced to roll back only to 2005-06 levels -- a difference of billions of dollars.

Senators so far have flatly rejected any sales-tax swap, instead offering a plan to double the state's $25,000 homestead exemption for first-time buyers and allow homeowners to carry some of their Save Our Homes tax savings with them when they move to a new home.

The House is expected to begin moving its own measure to make Save Our Homes portable, which some have taken as a signal that it does not expect the Senate to budge on the sales-tax swap.

That would leave the debate about how large a cut to force local governments to absorb as the central dispute in the session's closing weeks.

Sen. Mike Haridopolos, R-Melbourne, chairman of the Senate Finance and Tax Committee, said he was not giving up on finishing the session May 4, as scheduled, with a tax-cutting package complete.

"We all want to get out of here and be with our families," Haridopolos said. "But more importantly, we want to go back to our neighbors and say we cut taxes across the board in a fair manner."