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Can growth pay for all of Crist's promises?

The Republican gubernatorial candidate has an ambitious agenda. But some wonder whether the numbers add up.

By STEVE BOUSQUET
Published August 8, 2006


TALLAHASSEE - As a candidate for governor, Charlie Crist is promising to spend a lot of money.

He has committed to putting tens of billions of dollars into reducing class sizes, as the state Constitution requires, even though Gov. Jeb Bush and other top Republicans still would rather repeal that requirement.

"It's time to move on," Crist said.

But that's just the start. Crist's other priorities include:

- The "antimurder" bill, which would crack down on probation violators and would cost, by one legislative analysis, $118-million a year by 2010.

- Giving 10 percent annual pay raises to the top 25 percent of teachers in Florida. First-year cost: $150-million.

- Adding reading coaches to all public schools, at an annual cost of $100-million.

- Spending at least $1-billion more every year on public schools, just as Bush did.

At the same time, Crist is pushing the biggest property tax cut in Florida history. He wants to double the homestead exemption to $50,000, subject to voter approval. In the first year alone, the state estimates counties and cities would lose $2.1-billion in tax revenue.

Is Crist promising more than Florida's budget can deliver?

"I don't think so," Crist said. "As we all know, Florida continues to grow. As a result, our budget continues to grow. ... We can do it by living within our means, because our means continue to grow without raising taxes in our state."

Crist said steady growth in tax receipts provides sufficient money to pay for smaller class sizes and the costs can be offset by promoting alternatives to public school classrooms such as virtual schools, homeschooling and team teaching.

"I think there are ways that we can implement the class size amendment without breaking the bank," Crist said.

Crist's opponent, Tom Gallagher, who opposes the class size amendment, says it doesn't add up.

"Where's the money come from?" Gallagher asked Crist in a recent forum. "Twenty billion dollars doesn't just come out of thin air."

State revenue forecasters estimate Florida will have about $4-billion in new revenue over the next two years. And the next governor will inherit from Bush a cash reserve of $6.4-billion.

If elected, Crist may need to use that pot of money to fund everything he is proposing.

In addition to the other items, Crist wants to create a grant program to help incoming teachers finance home purchases no cost has yet been estimated, and he wants to put more money into affordable housing.

At the same time, he's pushing for tax cuts.

In addition to doubling the homestead exemption, he also supports changing the Save Our Homes property tax cap so homeowners can take the tax break with them when they buy a more expensive home anywhere in Florida.

The 2006 Legislature balked at the idea and decided to study it instead. A House estimate put the first-year cost at $450-million, swelling to $2.4-billion by the year 2013.

"The numbers are staggering," House Speaker Allan Bense, R-Panama City, said in the spring.

Still, Crist's biggest tax relief proposal would double the homestead exemption to $50,000, subject to voter approval in individual counties. It's an idea that has caused alarm among counties, cities and school boards.

Crist said the $25,000 exemption is an anachronism, now that the average home value in Florida is near $250,000.

If all 67 counties approved the higher homestead exemption, local governments would lose $2.1-billion in revenue in the first year, according to a legislative analysis. Crist's campaign estimated the first-year impact at $2.26-billion.

Crist is proposing a cut in local property tax revenue at a time when a growing share of state education spending is being shifted to local property taxpayers.

The Florida Association of Counties said Crist's proposal would have a devastating impact, especially on small rural counties where the tax base is small and most homes are assessed at $50,000 or less for tax purposes.

The Constitution already caps counties' and cities' operating tax rates at $10 per $1,000 of taxable value, and 12 counties are currently at the 10-mill cap, meaning their local taxing power is exhausted.

"When you double the homestead exemption, you take entire communities off the tax roll," said Kriss Vallese, a spokeswoman for the counties group. "For smaller counties struggling to provide basic services, you could essentially bankrupt the whole county."

The Florida School Boards Association has gone further. Executive director Wayne Blanton has suggested Crist's proposal would run afoul of a provision in the state Constitution requiring equal funding of all 67 school districts statewide.

In the spring, the Legislature also rejected a doubling of the homestead exemption for all homeowners, opting instead for a much more modest version that would double the tax break only for low-income senior citizens. It is subject to voter approval in November.

One of the Legislature's most fiscally conservative members said Crist may be able to keep his promises because Florida's phenomenal growth ensures that the tax base will continue to expand.

Rep. Fred Brummer, an Apopka Republican who has been chairman of the House Finance and Tax Committee for the past two years, said Crist's success also will depend in part on whether the revamped Medicaid program really reduces fraud and waste and saves money, and is expanded beyond its two pilot counties.

"If you're bold enough to go ahead and expand that program, then you have substantial additional resources for teacher salaries and for reducing property taxes," Brummer said. "Both of those are high priorities for fiscal conservatives."

Asked if he believed Crist is a fiscal conservative, Brummer - who supports Gallagher - paused.

"I don't know, without looking at his record directly," Brummer said. "I certainly hope he is."

Steve Bousquet can be reached at bousquet@sptimes.com or (850) 224-7263.