Tax plan finds weak support
The controversial idea clears a hurdle; the House vote will be tough.
By ALEX LEARY
Published March 24, 2007
TALLAHASSEE - House Republicans on Friday approved a controversial plan to slash or eliminate property taxes by giving voters in each of the state's 67 counties the option of paying more sales tax.
"For too long, government has been taking and taking and taking," said Rep. Trey Traviesa, R-Tampa. "Today's vote was about government giving back."
But the proposal, which has been changing amid a cross fire of criticism, emerged from the House Budget and Policy Council vote lacking the support to survive on the House floor.
Democrats on the council voted in unison against the measure, saying that it shifts an even greater share of the tax burden to businesses, renters and snowbirds.
Even some Republicans who voted in favor of the plan expressed doubts about how it would work.
The plan requires amending the state Constitution, and a special election this year could be held only if three-quarters of the members of the House and the Senate support the measure.
Under the proposal, owners of property that doesn't have a homestead exemption, such as second homes and rental property, would save about 15 percent on their taxes because of the plan's rollback of the tax revenue available to governments for spending. Homeowners who have a homestead exemption would get 46 percent off their bills or pay no property taxes at all.
That rankled Democrats, who say property owners with homesteaded property are the ones who need tax relief the least because they already get the benefit of a cap on tax increases.
"If you take an unvarnished look at this plan ... it's got warts," said Rep. Jack Seiler, D-Wilton Manors. "It's got warts all over it."
One Republican, Don Brown of DeFuniak Springs, voted against the plan Friday when it was considered by the Budget and Policy Council. The vote was 21-12.
The planned constitutional amendment has several components:
- Cities and counties would have to roll back taxes on all property to what they were during the 2003-04 budget year, trimming $5.5-billion in property taxes but also taking that much from government coffers. Future revenue collection would be capped by the rate of inflation.
- The state sales tax would increase 1 percent to replace any lost property taxes for schools.
- Voters in each county could also vote to get rid of all additional property taxes, which support local government and discretionary school spending, in exchange for an additional 1.5 percent sales tax.
The county referendums would have to be held by 2010.
Some county officials expressed fear at having disparate tax structures in neighboring counties. For example, Pinellas County could opt for no property taxes on residences and a higher sales tax, while Hillsborough could choose just the opposite: keep the scaled-back property tax but not raise the sales tax.
Led by House Speaker Marco Rubio of Miami, Republicans have aggressively pursued tax relief proposals. But the tax swap plan, lauded by some as bold and innovative, has come under increasing criticism.
To allay concerns, leaders said they would give local voters the chance to approve part of the sales tax increase. But critics say that would only create more problems and confusion.
The Senate, which has preferred a slower, more careful approach to the tax reform issue, seems reluctant to approve a broad sales tax increase.
Despite the odds, Rep. Ray Sansom, the House budget chief, remained optimistic Friday.
There's a true commitment for major property relief," said Sansom, R-Destin.