Tax reform plan chalks up a win
By STEVE BOUSQUET and STEPHEN HEGARTY
Floridians on both sides of a politically explosive plan to lower the state sales tax and expand it to dozens of services squared off Friday at hearings in Tampa, Orlando and Tallahassee.
About 100 people showed up in Tampa. Lawmakers heard from fish farmers, citrus growers, CPAs and lawyers who opposed the tax reform plan. A group of Pinellas County Realtors poked "Ax the Tax" signs in the air.
"If this tax becomes law we'll be fighting, we'll be going nuts in the business world and people will lose jobs," said David Hurley, president of an engineering and surveying firm in Tampa.
They applauded when Florida State University economics professor Randall Holcombe told lawmakers, "The bottom line is . . . we don't need to improve (our sales tax structure). It's not urgent. We're not facing a crisis."
Though they were far outnumbered, several audience members spoke in favor of the proposal, including representatives from the AARP and two Pinellas County School Board members.
"I don't lease skyboxes for Super Bowl events," said Dorothy Darling of Tampa. "The big businesses that use all these things should pay taxes."
In Orlando, antitax protester Doug Guetzloe passed out tea bags and said, "We're going to have a tea party."
In Tallahassee, a two-hour hearing at the Capitol ended as everyone knew it would, with a unanimous committee vote in favor of Senate President John McKay's proposal.
On identical 9-0 votes, the Senate Finance and Taxation committee passed the proposed constitutional amendment (SJR 938) and a related measure (SB 1106). They list what would be taxed and what wouldn't.
The panel's chairman, Sen. Ken Pruitt, R-Port St. Lucie, said Florida now collects $17-billion a year in sales taxes but exempts $23-billion.
"There is something inherently wrong with your tax system when you exempt that much," Pruitt argued in making the case for McKay's tax package.
Also speaking in favor of McKay's plan to reduce the sales tax to 4.5 percent and tax many services that are now exempt were former state Revenue Director Larry Fuchs and lobbyists for school boards, counties, cities, the National Organization for Women and the Florida Alcohol and Drug Abuse Association.
"We're in a crisis. We all know that. It's not going to get any better," said Wayne Blanton of the Florida School Boards Association. Changing the tax system is "courageous" and "the right thing to do," Blanton said.
Mary Kay Cariseo of the Florida Association of Counties said the state's shaky fiscal base has forced local governments to bear a growing share of the government tax burden.
Opponents were led by J.M. "Mac" Stipanovich, a lobbyist for accountants who was Gov. Bob Martinez's chief of staff during the last big fight over taxes: the services tax debacle of 1987.
Other critics represented the Florida Association of Broadcasters, the Florida United Business Association, the Florida Trucking Association, the National Federation of Independent Businesses and the Smurfit-Stone Container Corp., a pulp paper producer.
Stipanovich faulted senators for seeking to reduce such a complex issue to a 75-word ballot question. He said voters would see through the rhetoric of tax reform.
"People in this state aren't going to believe you're going to all this trouble not to raise your taxes," he said. "When all is said and done, this is about more money."
One major potential change in the plan emerged Friday.
After hearing criticism of a planned tax on freight transportation, senators said they would consider leaving that tax break in place. That would leave a $233-million hole in McKay's plan, which means other services would have to be taxed.
In the committee vote, Republicans Pruitt, Ginny Brown-Waite of Brooksville, Tom Lee of Brandon, Lee Constantine of Altamonte Springs and Howard Futch of Indialantic were joined by Democrats Skip Campbell of Coral Springs, Steve Geller of Hallandale Beach, Tom Rossin of West Palm Beach and Rod Smith of Gainesville.
Only Constantine voiced reservations. "I'm struggling with this issue," he said.
McKay's plan is expected to hit the Senate floor by Thursday, where swift passage is likely.
Then the opposition will focus its energy on the House, where there is widespread criticism of McKay's plan.
"It's got to go through both houses, and I don't see anybody signing up for that plan in the House," said Sam Ard of the Florida Cattlemen's Association, an opponent.
After sitting through hours of hearings in Orlando and Tampa, Rep. Johnnie Byrd of Plant City said he believes the public feels as he does.
"I heard from Floridians who believe they're already paying enough in taxes, and I believe that, too," said Byrd, who is in line to be the next speaker of the House.
"Somebody's got to convince me that our tax system's broken. I don't believe it is."
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From the Times state desk
From the state wire