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Politics

House tells voters: You pick

By ALEX LEARY
Published March 22, 2007

TALLAHASSEE - After enduring weeks of criticism that their property tax plan tramples local control, Republican House members Wednesday announced the ultimate handoff.

Voters in each of Florida's 67 counties should decide on one of two tax structures, they said.

The first choice eliminates all property taxes on homesteads in exchange for a sales tax increase up to 2.5 percent. The second would mean voters accept a property tax rollback to 2003-2004 levels, saving primary homeowners about 45 percent on their tax bills.

The result could be that Pinellas operates under a different tax system than, say, Hillsborough.

"We heard loud and clear, they want local control," Rep. Ray Sansom, R-Destin, said of local government. "There is major property tax reform either way."

The plan, which has a long way to go to become a reality, could easily create a logistical nightmare and a dizzying tax structure, opponents say.

Counties that opt for higher sales taxes might seem an ideal place to live, but a bad place to do business, and vice versa.

Battles could emerge within counties, too. In Orange County, home to Disney and other tourist destinations, voters may ditch property taxes but the increased sales tax could hurt the very industry that allows them to afford homes or businesses in the first place.

"I'm sure it's going to create some tension," said Sarah Bleakley, a lobbyist for the Florida Association of Counties, who like so many people following the tax debate in Tallahassee was still trying to decipher the latest change Wednesday night.

"Obviously my colleagues are back at the drawing board," said Democratic House leader Dan Gelber of Miami Beach. "There seems to be more questions than answers."

While there are two distinct options to the latest plan, there is one common component: The portion of property taxes used to fund schools, about 30 percent of each homeowners' bill, would cease to exist. It would be replaced by a 1 percent sales tax increase.

House leaders say the additional sales tax would adequately replace the $3.1-billion lost in school property taxes.

In counties that chose to eliminate the rest of the taxes on homesteaded property, the sales tax would increase another 1.5 percent.

In all, the current 6 percent state sales tax rate would go up by 2.5 percent. Local option taxes, such as the Penny for Pinellas, would remain in effect.

Concerns about higher sales taxes, which many argue disproportionately affect the poor, could drive counties to opt for the second option of rolling back tax levels to 2003-2004.

The rollback would save residents $5.5-billion in property taxes, but it takes the money out of local government coffers.

If a county chose the rollback option, primary homeowners would save an average of 45 percent: 15 percent from the rollback and 30 percent from the elimination of the school tax.

Whichever way counties voted, the plan would save nonhomestead property owners money. Second home owners would save about $668 and the average commercial property owner $2,919, according to House figures.

Wednesday's proposal, which is different from another House plan to simply roll back taxes to 2001 levels and cap future revenue collection, still needs the approval of the full House. The Senate also is working on plans, but has been much slower to develop them.

If approved by the House and Senate, the plan would then require a statewide vote to change the constitution. If the constitutional amendment was approved, then the counties would all have to hold individual referendums by 2010.

"It's a difficult issue," acknowledged House Speaker Marco Rubio, R-Miami. "But we pride ourselves on the fact that we're going to push ideas. We see that as our role."

[Last modified March 22, 2007, 02:03:34]