Tax plan draws fire at hearing

An organization of small businesses says caps can be overridden easily.

Published February 23, 2007

TALLAHASSEE - The head of a group representing small Florida businesses opposed the House Republican leadership's plan to exchange lower property taxes for a higher sales tax, in testimony Thursday before the Senate Finance and Tax Committee.

Members of the National Federation of Independent Business are worried such a swap, while providing short-term property tax reductions, in the long run would result in higher levies on commercial property, said state director Allen Douglas.

House GOP leaders Wednesday unveiled a two-part plan that includes a state constitutional amendment that would abolish taxes on homestead property - primary homes - while increasing the state's sales tax from 6 percent to 8.5 percent. The increase would go to local governments to partly offset property tax losses.

The proposed amendment would limit state and local revenue increases to a factor equal to population growth and inflation, starting from 2000-01 budget figures.

Local governments, though, would be able to exceed the cap by unanimous vote.

"Over the long term, as local governments need revenues, simply with a unanimous vote they could get around the revenue caps and begin to tax businesses more and more," Douglas said.

His members, instead, favor Gov. Charlie Crist's proposal to place a 3 percent cap on annual tax increases for commercial and other nonhomestead properties similar to the one already provided for homeowners under the Save Our Homes Amendment.