A Florida Property Tax Backup Plan
The vote on a constitutional amendment to dramatically change property taxes in Florida is still seven months away, but the head of a group that has the power to revamp the state’s tax structure is already preparing for its defeat.
Allan Bense, chairman of the Taxation and Budget Reform Commission, which is empowered once every 20 years to place tax and budget amendments on the November ballot, said that when the group meets again on Tuesday he will suggest they discuss Plan B: What to do if voters reject the amendment lawmakers have put on the Jan. 29 ballot.
”My instincts tell me to go ahead and pursue other alternatives so that on Jan. 29 we’re not caught flat-footed and have to just start up brand new,” said Bense, a Panama City road contractor and former speaker of the Florida House of Representatives.
Republican legislative leaders are eagerly promoting the proposed amendment, which gives Florida mortgage holders a one-time choice: keep their existing Save Our Homes homestead exemption, including the 3 percent annual cap on increases to their home’s assessed value, or trade it in for a super-exemption of up to $195,000 and no direct cap on future tax increases.
House Speaker Marco Rubio believes the amendment will ”make property taxes fairer and more affordable.” Gov. Charlie Crist proclaims “taxes will drop like a boulder.”
Bense is not willing to handicap the election, but he doesn’t share the enthusiasm of Crist and Rubio. He said he will recommend the tax and budget panel pursue a ”dual-track” backup plan.
Meanwhile, opposition to the proposal continues to mount from taxpayers themselves. Owners of business property and non-homestead residential property say the amendment doesn’t go far enough to bring equity into a tax system in which they bear a disproportionate share of the burden.
Firefighters, school boards and local government officials have their own complaints, saying the proposal would require sharp cuts in everything from libraries to firetrucks.
Even the citizen petition group that formed to help Rubio push his original tax-cut plan is still trying to raise $2 million and get 611,000 signatures to put an alternative amendment on the November 2008 ballot.
”There’s a lot of confusion on the street about what the Legislature did,” said Bernie Navarro, head of the Miami housing market-based Citizens for Property Tax Reform. “Once people figure it out, most people are better off with Save Our Homes, so they feel that nothing is going to change.”
Democrats, who supported Phase One of the tax cut plan - a $15 billion rollback in county and city taxes– are also predicting the amendment’s defeat. They now say the tax and budget panel, appointed by Crist, Rubio and Senate President Ken Pruitt, is conveniently positioned to step up and offer another option.
”This thing is going to fail and when it does these will be the adults in the room who craft something that’s thoughtful and a better choice,” said House Democratic Leader Dan Gelber from Miami Beach.
The Florida Constitution requires the Taxation and Budget Reform Commission to convene in 2007 for the second time in Florida real estate market history, only 17 years after the first one met in 1990. But the coincidence of the panel meeting in a year when tax issues dominate the agenda is not lost on its members.
”You cannot blame communists or the Trilateral Commission,” said Carlos Lacasa, a commission member and former Miami state legislator. “The fact that the real estate bubble coincided with the timing of the commission was pure coincidence.”
Lacasa also believes that because the Legislature’s two-part property tax plan won’t solve the problem, the issue will “overshadow everything until it’s resolved.”
The mission of the 25-member panel is broad and vague: assess the state’s tax and budget process and recommend the system that will work best for 20 years. Their recommendations could include a broad range of things, from asking voters to eliminate sales tax exemptions, impose an income tax or approve an entirely new property tax scheme.
The ideas also will be shaped by members themselves, an assortment of business and government leaders from executives of Gulf Power Corp. and Publix to the Lake County tax collector, the Lee County property appraiser and the president of the Pinellas County teachers’ union.
Twenty-one of them are Republicans, four are Democrats and only three are from South Florida. Three of the members have been through this before, as members of the first tax commission in 1990, when the state was in the midst of a recession.
Others are bringing with them a tax agenda. Lee County Property Appraiser Ken Wilkinson is the maverick author of the Save Our Homes tax cap, and he now wants to make it portable to new homes.
Sarasota businessman John McKay, a former president of the Florida Senate, has been on a decadelong crusade to update the sales-tax base by eliminating some taxes and replacing them with an expanded sales tax that covers some goods and services that are now exempt.
The commission’s job should be to ‘’structure a tax system that has the capability of meeting the budget needs of the future,” McKay said. “Nobody has really done that and the demographics of Florida and the demand of Florida citizens have evolved considerably since the first tax system was implemented.”
SOURCE: The Miami Herald
