Resolution on property taxes hinges on speaker's decision

Article Courtesy of Palm Beach Post

By S.V. Dáte And Michael C. Bender
Published May 2, 2007

TALLAHASSEE — Who has the bigger bullhorn in Florida: the governor or the House speaker?

Whether lawmakers can reach a compromise on property tax reduction in the remaining days of this spring's legislative session may well depend on how the speaker, Marco Rubio, answers that question.

For three months, Rubio has pushed to eliminate property taxes on homesteads and replace some of the lost money with a sales tax increase - and for three months, he has found no interest in the Senate and only slightly more from Gov. Charlie Crist, a fellow Republican.

Now, with only three days to go before the scheduled adjournment, Rubio must decide whether it's smarter to accept a compromise that does not include a sales tax hike or risk a possible special session in which he has less control of the agenda.

On Tuesday, it was unclear which direction he was heading. Negotiations between the House and Senate, which stalled last week, remained nonexistent, even as all involved expressed optimism that an agreement would come together.

Senate leaders, as part of their efforts to persuade their House counterparts to drop their insistence for the sales tax swap and to accept a smaller overall reduction package, have been selling the idea for weeks that Rubio's influence would diminish at the close of the regular session.

"The governor owns this issue after Friday," one top Republican senator said privately.

Sharing that view is Crist's staff, which has been under the impression since Saturday that Rubio will not insist on a sales tax increase, thereby making a deal likely by mid-Thursday or Friday morning.

Crist's optimism is genuine: He truly believes that an agreement that cuts property taxes significantly but not enough to imperil cities and counties will be reached, without any sales tax increase, said one official in his administration.

High expectations for Rubio

Many conservative Republicans have seen Rubio, 35, of West Miami, as their great hope in the years to come, particularly with Crist diverging so frequently from positions of former Gov. Jeb Bush.

The expectations for Rubio were stoked in part by Bush himself, who during Rubio's designation ceremony in 2005 gave him an Oriental sword in a stand bearing the inscription: "Unleash Chiang." The phrase was a slogan of ultraconservatives in the 1950s and 1960s, who wanted the United States to help Chiang Kai-shek retake Mao's China. The Bush family adopted it as an exhortation during athletic contests.

Rubio is paying Bush's first budget director, Donna Arduin, $10,000 a month for advice on tax issues. She produced for him a report explaining why taxes on property are bad but taxes on consumption, such as a sales tax, are good.

Rubio has taken the advice, describing the property tax as "immoral" during one anti-tax rally.

And, following the property insurance special session in which Crist took the lead and won much of the credit, Rubio pushed for the lead role on property taxes.

But Rubio has miscalculated in believing that his popularity with Bush supporters and his perch in the House would translate into political power rivaling Crist's, even though Crist was chosen in a statewide election and Rubio was chosen by a majority of about 80 Republican House members, according to some Republican senators and officials in Crist's office.

"Charlie Crist is the governor of 18 million people," the Republican senator said. "Marco Rubio is not the speaker of 18 million people."

House rides momentum

Rubio and his allies, though, disagree that he risks losing control of the debate should the property tax issue go unresolved this week.

The idea of wiping out taxes on primary homes, called homesteads, has sparked imaginations across the state, and House Republican leaders point to the favorable e-mails and letters the proposal continues to generate.

That momentum, House leaders believe, would help them outlast the governor in a possible special session.

"If we get out without a proposal, that will just deepen the frustration out there," said House Majority Whip Ellyn Bogdanoff, R-Fort Lauderdale. "That puts us in a better position."

That confidence was evident in the House's strategy when it began the joint House-Senate conference committee last week.

Rep. Dean Cannon, R-Winter Park, chief negotiator for the House, opened the talks by saying he would consider other methods of tax reform but demanded five-year tax cuts totaling $41 billion to $45 billion, a figure senators said would shut down local government without replacement revenues.

And when the Senate increased its initial proposal of $12 billion in total tax reductions over five years to $15 billion, the House came back with a counter-offer changing its bottom line by $3 billion - but $3 billion more, not less, than its original proposal.

If an agreement does not come in the next few days, however, Crist has not indicated he necessarily will call a special session. Another option available to him is to give the matter to the Taxation and Budget Reform Commission, which has the ability to place questions on the 2008 ballot without legislative approval.

Crist appointed 11 members of the 25-member panel, and Rubio and Senate President Ken Pruitt, R-Port St. Lucie, each appointed seven. A question needs 17 votes to make the ballot, which means Crist's and Pruitt's appointees could put a proposal to voters without the aid of any of Rubio's.