Opinion: A sunset bill for tax reform

What often pass for new ideas in Tallahassee are actually old ones that only the lobbyists have been around long enough to remember. "Sunset," as a means of achieving tax reform or any other great goal, is of that category.

The House's counteroffer to Sen. John McKay's demand for tax reform -- of which it hasn't heard the last despite Wednesday's staged "committee" vote to kill his constitutional amendment -- may consist of a sunset bill (HB 1791) by Rep. Nancy Detert of Sarasota and several other Republicans including Tampa's Sandra Murman. It proposes to repeal all 248 specified sales tax exemptions on July 1, 2004, and commit the Legislature to consult a set of standards in deciding which to re-enact. Thereafter, any old or new exemption would "sunset" again every five years.

That conspicuously excludes the 87 personal, professional, business and financial services that aren't taxed because the sales and use tax law applies only to merchandise. Detert makes no apologies for the omission, even though services are where the real money would be if the Legislature ever agreed that it needed to collect more. The only other large single source would be to tax groceries, which Detert says she doesn't want to do.

Yet a vote for her bill could be demagogued by campaign opponents as a vote to tax groceries, prescription drugs and even seeing-eye dogs, just as the antireform lobbies demonized McKay's plan. Though it strains belief that the Legislature would tax groceries, HB 1791 would put them on the sunset table along with the rest of the 248 exemptions. Thus it also strains belief that a majority of the House would vote for it, although some people in Tallahassee think that will happen.

"Sunset" is, as only two of today's legislators were present to witness, precisely the process that led to the poorly drafted services tax of 1987 and to the special-interest firestorm that evoked its repeal. The 1986 session had sunsetted all specified exemptions; when Gov. Bob Martinez pondered the options, he perceived that the easiest, most productive and (he thought) fairest response would to re-enact them whole and extend the tax to services. The debacle ensued.

For a time, the Legislature labored under a "sunset" law that required most statutory agencies, especially regulatory boards, to be reviewed under terms that meant the failure to pass a new law would render them extinct. But for all the time and money lawmakers spent on that, only two boards, those regulating watchmakers and psychologists, were ever allowed to pass away. Soon after, the Legislature reinstated the psychologists' board.

The only people who did well by that were the lobbyists employed by the client professions to protect them from the devil they didn't know and especially from potentially unregulated competition. Certain legislators bagged handsome campaign contributions on that account, too. House Minority Leader Lois Frankel probably had that history in mind when she remarked that Detert's bill would be a cash cow for legislators "to fill their campaign accounts with donations from the hundreds of industries that will want to keep their tax breaks." It would also be a full-employment act for lobbyists.

Yet Detert's intent appears to be constructive. In theory, the systematic review of tax exemptions is sound policy, just as McKay has been trying to say.

However, her plan is significantly different from his. It would be a law, not a constitutional amendment, so the Legislature could simply come back and repeal it. It does not embrace McKay's requirement of a three-fifths supermajority to re-enact any exemption. Again, only a constitutional amendment could accomplish that.

McKay, appearing entirely unruffled by the 99-0 House "committee" vote against his plan, said afterward that he hadn't seen Detert's bill. He did not rule out, however, the prospect of negotiations on some such alternative.

"We'll absolutely have tax reform at this session," he said. "It may not be our plan, but that's okay."

Something else that few of today's legislators can recall from personal knowledge is how hot it gets in Tallahassee during the late spring and summer. House members who think they had the last word on tax reform Wednesday might want to ask the veteran lobbyists just how hot that can be.

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