tampabay.com

Tax plan goes from bad to worse

By A TIMES EDITORIAL
Published March 23, 2007


Republicans in the Florida House have achieved something truly extraordinary. They have managed to rewrite their terribly flawed tax relief proposal and make it worse, a feat previously thought to be impossible. It is time for adult supervision from the governor and the Senate to steer this debate back into reality.

Forcing drastic cuts in government spending through property tax rollbacks, abolishing property taxes on homesteads and replacing some of the money by raising the state sales tax by 2.5 cents would be short-sighted and irresponsible. For starters, it would create even more inequities and replace a stable tax source with one that is regressive and less reliable. The response by House Speaker Marco Rubio and his team to the rising chorus of critics only underscores the folly of this approach.

First, Republicans agreed to exempt 30 poor counties from the property tax rollback because it would ruin them. Now they have rewritten a proposed constitutional amendment to call for voters in each county to decide whether to raise the local sales tax by up to 1.5 cents to replace property taxes on homesteads. And since the legislators can't figure out a formula for distributing sales taxes back to local governments and taxing districts in lieu of property taxes, they would dump that problem on local officials as well. Better ideas have been drawn up on cocktail napkins as bartenders served a final round.

Imagine the chaos. All 67 counties would hold referendums sometime during the next three years. Some counties would abolish property taxes on homesteads and others wouldn't. The sales tax in neighboring counties could wind up varying by 2 or 3 cents on the dollar. Even within counties, cities would fight over whether they would be better off with property taxes or higher sales taxes. Such economic uncertainty over the future and such wild variations between counties would be a nightmare for businesses and homeowners. In a state where issues such as growth and transportation cry out for regional solutions, this tells every voter in every county to consider only his own selfish interests. It is an abdication of responsibility by legislators elected to provide a broader vision for Florida.

There is one glimmer of hope in the proposal that will be considered by the House Policy and Budget Council today. Lowering school property taxes statewide and replacing the money with state revenue has merit. The House Republican plan would eliminate school property taxes required by the state on homesteaded property and replace the education money with a 1-cent increase in the statewide sales tax. A better approach would be to lower those school property taxes for all types of property, including business and nonhomesteads, and replace the money by eliminating existing sales tax exemptions. But lawmakers should keep working on this concept, because it would provide immediate, equitable relief.

Of course, that isn't nearly enough to salvage this idiotic House bill. The goal in Tallahassee should be to improve Florida's unfair tax system, not make it even worse.