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A foolhardy voter initiative doubling the homestead tax exemption would imperil Florida's counties and schools.
Thousands of Floridians are falling for one of the oldest sucker tricks: "Sign here to cut your taxes."
The con game this time is a voter initiative to double the $25,000 property tax assessment exemption for people who own and occupy their homes. A Vero Beach millionaire with conspicuous political ambitions is bankrolling the petition drive. "Let's rein in out-of-control government," he says, "and put our tax money back in the hands of those who can do the most good with it - you the Florida taxpayer."
How beguiling. How untrue.
State economists say the initiative would reduce property tax collections for schools, cities and counties by nearly $2-billion in 2005.
Only someone who is willfully ignorant can pretend that the schools, cities and counties could absorb such losses.
The schools are already having difficulty coping with the class size initiative voters approved two years ago. If there is a police force, fire department or county sheriff's office with too many people on its payroll, we have yet to hear of it.
The total losses would include $185-million in Pinellas County, $125.7-million in Hillsborough, $52.7-million in Pasco, $18.2-million in Citrus, and $20.2-million in Hernando.
So those responsible for schools and public safety would have to look for replacement money somewhere. The first resort would be to the difference between their current tax rates and the Constitution's 10-mill ceilings. For many people, the higher rates would erase savings from the increased exemption. They would pay more in taxes, not less.
As it happens, 16 small counties already are at the 10-mill limit and would face bankruptcy. Several school districts are uncomfortably near the ceiling. Hernando, at 9.376 mills, is one of them.
"What it will force the Legislature to do," warns Wayne Blanton, executive director of the Florida School Boards Association, "is to come up here and raise anywhere from one to three cents of sales tax. Or what I think will happen in the long run is they will put school districts to levying sales taxes in all 67 districts. They could allow you to increase property tax rates, or they could allow you to levy sales tax at the local level without the referendum."
Or they could do nothing. Given the endemic cowardice of the Florida Legislature where tax policy is concerned, no one can say what all the consequences would be, other than that for many Floridians, if not most, the sum would be terrible. This initiative is grossly irresponsible.
The worst harm, obviously, would fall on people who rent the homes they live in. Rental property, like all other commercial real estate, does not qualify for homestead exemption. When tax rates are raised - as they would have to be - renters pay more rent so that homeowners can pay less tax. Any renter who signs that petition, or votes for it, has been played for a fool.
The inadequacies and unfairnesses of Florida's tax base are the sum of many feel-good swindles like this one. In 1924, land promoters conned the Florida public into prohibiting income taxation. In 1934, the first homestead exemption caused the school year to be shortened and many schools to be shut. In 1940, the industrialist and timber land baron Ed Ball gulled the public into abolishing the state's tax on real estate. In 1949, legislators who had sold their souls to a coalition of special interests killed Gov. Fuller Warren's entire tax reform program and forced him to accept the sales tax he had promised to veto. The result is that only one other state taxes poor people harder, and rich people easier, than Florida does.
If Florida has learned nothing else from its history, the one lesson ought to be this: Don't believe rich people who promise to cut your taxes.