Disagreements among legislators may scuttle property tax reform
By Mark Hollis and Linda Kleindienst
June 12, 2007
TALLAHASSEE -- A property tax-cutting plan proposed by Republican leaders as the blueprint for a special session starting today is being challenged by Democrats. They say the plan is flawed because it slashes school spending, directs the bulk of relief to those who already enjoy big tax savings and may never win voter support.
The scenario means Floridians eager to see steep tax cuts should brace for the possibility of more delays.
Democrats particularly are upset that the plan violates previous pledges by Republican legislative leaders to protect schools from cuts. New estimates show Florida's schools would lose $2 billion a year, and there's no guarantee the state would make up that loss.
``I have grave concerns. Not about the principle of reducing taxes, we all agree on that, but on a $2 billion cut to education based on a vague promise'' to replace it, said Sen. Steve Geller, D-Cooper City.
Questions also are being raised about a key portion of the plan that requires voter approval during the Jan. 29 presidential primary. Changing the constitution now requires 60 percent voter approval. But in South Florida -- where a large percentage of presidential primary voters live -- roughly half the homeowners would get no tax break, although they would face a guaranteed cut in local government services.
``I'm a little concerned that the constitutional amendment is doomed based on the wording of it today,'' said Rep. Jack Seiler, D-Wilton Manors.
The voices of commercial landowners, snowbirds and landlords were the loudest demanding tax relief during public hearings in the fall. But the plan gives the biggest cuts to property owners with homestead exemptions who already are protected by a Save Our Homes' amendment that caps property assessment increases at 3 percent a year.
Almost two-thirds, or $20 billion, of the new savings under the $32 billion five-year plan, would go to homesteaders.
The plan allows permanent Florida residents to retain the Save Our Homes savings if that's a better deal for them. But the plan doesn't block local governments from raising taxes, under supermajority votes, which means that even long-term residents' taxes could creep up over time.
``If the net result of this is a savings of 3 to 5 percent, then, I'm not sure anyone is happy,'' said Sen. Ted Deutsch, D-Delray Beach.
The plan has two major components, one of which is a rollback of tax revenue for local governments that both Democrats and Republicans support. That part of the plan will be politically easy to enact. It requires only a straight majority vote of the Legislature before being sent to the governor.
Property tax revenues for city and county budgets for the coming fiscal year 2007-08, which begins Oct. 1, would freeze at the current year's level. In addition, local governments would have to make additional cuts to their tax revenues of either 3 percent, 5 percent, 7 percent or 9 percent, depending on how much they had raised taxes between 2001 and 2006. Palm Beach County, for instance, would face a 9-percent cutback, and Broward County would trim at least 5 percent.
The other half of the plan is a sharp expansion of the state's homestead exemption. And that's where differences emerge between Democrats and Republicans, and where voter approval is needed.
Republicans say the plan simply pares back local government spending to levels that more closely match the rate at which Florida families' incomes, as well as their costs, such as food, medicine and gasoline costs, have increased. These Republicans characterized the cuts, the largest in Florida's history, as relatively painless to local governments.
``The cuts, they're not cuts, they're just bringing us back to reality,'' said Sen. Daniel Webster, R-Orlando.