Lawsuit seeks to block vote on tax amendment

The suit asks the state Supreme Court to act.

Article Courtesy of The St. Petersburg Times

By Alex Leary
Published July 10, 2007

TALLAHASSEE - The mayor of a small Broward County city asked the Florida Supreme Court on Monday to throw off the January ballot an amendment that would cut property taxes for millions of Floridians.

In a lawsuit, he argues that the proposed constitutional amendment does not make clear that passage would phase out the wildly popular Save Our Homes protection and overstates how much money some people will save.

By midafternoon, a spokesman for the Supreme Court said that copies of the suit had been distributed to the seven justices. Spokesman Craig Waters said that media interest had already turned the case into a "high-profile issue."

Should the suit prevail, the entirety of the Legislature's $30-billion tax cut package could be in jeopardy.

That includes $15-billion in cuts the Legislature has already imposed on local governments, which are in the midst of planning layoffs, service cuts and fee hikes as a result.

The lawsuit was filed by Weston Mayor Eric M. Hersh, a Democrat in his second term. Weston is an affluent city of about 60,000 on the edge of the Everglades.

In his suit, Hersh is represented by the city's law firm, which also represents scores of other municipalities in South Florida. Fort Lauderdale attorney Jamie Alan Cole said his firm, Weiss Serota Healfman Pastoriza Cole & Boniske, is doing the work as a "public service project," and had been researching the legality of the tax cuts since they were passed last month.

Hersh, 47, filed as an individual and as mayor, but his city is not a party to the suit. Weston, incorporated in 1996, has one of the lowest millage rates in the state and will not feel nearly as much pain under the tax cuts as some other local governments, as Hersh acknowledged.

"But that is today," he said, "and we don't know what the future brings."

There is precedent for challenging the wording of a ballot initiative written by the Legislature on the grounds that it is misleading. In 2000, a sharply divided Florida Supreme Court voted to remove an already-approved amendment regarding the death penalty.

"A ballot title and summary cannot either 'fly under false colors' or 'hide the ball' as to the amendment's true effect," the 4-3 decision read.

But Senate President Ken Pruitt, R-Port St. Lucie, said the suit was a waste of time. "Mayor Hersh ought to find a way to cut the taxes in his own city instead of dreaming up ways to knock this good initiative off the ballot and derail the largest tax cut in Florida's history."

So far, other city and county officials have been reluctant to join Hersh's cause, given public demand for cuts. The Florida League of Cities and Florida Association of Counties both said Monday they are exploring legal questions but did not endorse the suit.

To understand the legal challenge to the tax package, it helps to understand the tax package itself, which has two distinct parts.

In the first, the Legislature has ordered counties, cities and special taxing districts to lower their tax receipts, starting with the budgets now being finalized. By the fall, property owners will receive tax bills that should be lower by, on average, roughly $200.

The Legislature also ordered local governments to cap future increases in tax revenues, basically to account just for growth and the rise in personal income. Over five years, these measures would add up to about $15-billion in savings.

The second part of the tax package is the so-called super homestead exemption. It would account for up to $15-billion in savings. If approved, it would offer property owners a new exemption that covers 75 percent of the first $200,000 in assessed value and 15 percent of the next $300,000.

Most, but not all, taxpayers would be immediately better off under the super exemption than they are now under Save Our Homes protection, which caps at 3 percent annual increases in assessments on homesteaded properties.

In order to make the amendment more palatable to voters, the Legislature said homeowners could elect to keep Save Our Homes protection so long as they stay in their current home. For those accepting the new super exemption, the minimum exemption would rise from $25,000 currently to $50,000.

Hersh's suit attacks both elements of the package, and then some.

First, he says the amendment is impermissibly misleading. It disguises its most important purpose, which is phasing out Save Our Homes' 3 percent assessment cap. During the special legislative session on property taxes, House Democrats offered an amendment to clarify that point. But it was defeated on a party line vote.

"I felt very strongly we needed to fully disclose what we're doing," said Rep. Jack Seiler, D-Wilton Manors.

The constitutional amendment also errs, Hersh says, in saying the $50,000 minimum exemption would be available for everyone; in fact, it would not be granted to those keeping Save Our Homes.

Hersh also argues that the state Constitution gives local government, not the Legislature, the right to raise property taxes. Thus the Legislature has no right to impose curbs on local governments. In addition, he notes that the homestead exemption amendment contains language giving the Legislature the power to order local governments to roll back property taxes - something it has already done, six months before the amendment goes to the voters.

Finally, Hersh makes a technical argument about placing the amendment on the January presidential preference ballot. He says the state Constitution requires amendments with more than one subject to appear on the general election ballot in November.

The suit urges the Supreme Court to act directly, rather than sending the suit through the lower courts as is standard practice, because of the "usurpation of power" by the Legislature over local governments, now formulating their budgets.

The Supreme Court could do as Hersh asks, or send the matter to lower courts, or flat out reject the suit.

"I felt it was important someone challenge this very bad legislation," Hersh said. "If we prevail, we will send the Legislature back to work and demand they provide meaningful and lawful tax reform and put it on the November 2008 ballot."

Fast Facts:

What the suit says

Key allegations in lawsuit against the super homestead amendment:

  • It is misleading because it obscures its true purpose, which is eliminating the Save Our Homes protection against increasing home assessments.
  • It gives the state government powers reserved for local governments by the state Constitution, specifically the right to fix the rate of property taxes.
  • The amendment properly should appear on the general election ballot, rather than on the January presidential preference primary ballot.