Tax reform put off till June

Published May 3, 2007

Florida lawmakers surrendered to their differences Wednesday, announcing that a deal on property tax cuts cannot be reached before Friday's scheduled adjournment.

Instead, the Legislature will return for a special session on property taxes June 12-22.

"The issue is too important for our state and to our taxpayers for us to give them a product that we will not be proud of, " Senate President Ken Pruitt said. "While we are disappointed, we have come a long way."

House Speaker Marco Rubio, the Miami Republican whose reluctance to cede ground on a controversial tax swap helped drive the impasse, announced the news in his chamber at the same time as Pruitt.

Democrats declared it a failure.

The inability to agree on a plan leaves Florida's 67 counties and hundreds of cities uncertain over their fiscal futures as the 2007-08 budget planning cycle gets under way. The budget year begins Oct. 1, but tax notices must be delivered by August.

Most local governments have already engaged in exercises to identify budget cuts, despite having no idea exactly how much revenue they'll lose. The proposals before the Legislature vary greatly - from up to $50-billion in a statewide House plan over five years to as low as $15-billion in a Senate plan.

With no resolution expected until after the special session, cities and counties could be left to scramble to make the numbers add up.

"We are taking a process that typically spans six months and compressing a lot of work in two to four weeks, " said Pinellas County administrator Steve Spratt. "It's going to be more difficult to put our budget together."

Hillsborough County commissioners, meeting Wednesday when the special session was announced, immediately voted to cancel planned budget workshops and hearings scheduled for June, recognizing that they would have little to discuss.

They also will have to cut short their regularly scheduled summer vacation, planned for June 22 to July 17, in order to meet state deadlines for unveiling a balanced budget for next year.

Hillsborough County Administrator Pat Bean had already met with all department heads, starting before the session, encouraging them to find ways to keep costs in check.

"It was not a waste of time, but it was something we could have avoided had we known this, " Bean said.

Local elected leaders must meet and consider tentative budgets in July. From those meetings, proposed tax rates emerge for TRIM - or truth in millage - notices that county property appraisers mail in August.

After property owners get their notices, two public hearings must be held before a final budget and tax rate are adopted. The process must be complete before Oct. 1, when local government fiscal years begin.

The situation has frustrated Tampa Bay government leaders, who have put off key funding decisions and are busily crafting provisional spending plans with no certainty they'll hit the mark.

In Tampa last month, Mayor Pam Iorio directed department heads to prepare no-growth budgets, plan for layoffs and service cuts and announced a hiring freeze in anticipation of reduced income.

The moves put everyone on edge, from department heads down to rank-and-file employees who wonder how deep the cuts will go. Now those worries will be prolonged.

"The unknown is very difficult, " said Tampa finance director Bonnie Wise. "I'm going to have to pull out the timetable and see how this is going to affect us."

In St. Petersburg, where a modified hiring freeze has been in effect for over a month, officials have put off $400, 000 in renovations to the Coliseum theater because the city may not have the funds to operate the building next year.

City Internal Services Administrator Mike Connors said officials are preparing next year's budget assuming no revenue growth. They are also accumulating lists of potential program cuts and scrutinizing capital projects that will have ongoing operating costs.

A preliminary budget is due to the City Council on May 22.

"I have no idea what's going to be in that, " Connors said.

In Clearwater, Assistant City Manager Gary Brumback said his people are moving forward despite the lack of any certainty because they know there will be little time once the Legislature acts. "We can't wait, " Brumback said. "We'll come up with something that's doable on our level."

Though state leaders said they expect to begin next month's session with an agreement in hand, Rubio refused to discuss even the broad contours of a possible compromise. He hedged when asked if his plan to raise the sales tax to eliminate property taxes on primary homes was still in play.

"As a revenue replacement, I think it's something we'll continue to talk about, " Rubio said.

Gov. Charlie Crist said he was disappointed but added that the delay could be positive. "We've got to make sure we get this right, because this a big deal."

Asked if he should have played a bigger role in the discussions, Crist said, "This is a legislative matter."

Times staff writers Mike Donila, Aaron Sharockman, Bill Varian and Janet Zink contributed to this report.

Fast Facts:

Still on the table

Abortion notification (1602-1497): Requires 24-hour wait for a minor seeking abortion. Awaiting Senate vote.

Car insurance (1880, 7215): The Senate would extend current law. House, where bill is stuck, bumps up the mandatory coverage to $15, 000.

Property insurance: Senate makes it easier to get into Citizens Property Insurance Corp. and freezes rates until 2009. House, where bill is stuck, leaves current law as is.

Elections bill (537-960): Moves presidential primary to Jan. 29 and requires paper trail in elections. In House.

KidCare (1173): Streamlines eligibility rules and increases enrollment in children's insurance program. Possibly dead in Senate.

Video lottery (1376, 1551): Legalizes video lottery terminals at tracks and frontons. Bottled up in House.

Vouchers (2380 and 2382/7145 and 7211): Several bills have morphed into one, and it awaits a Senate vote today. There are other bills, however.

Sports franchises (1079, 323, 544): Provides $2-million in extra sales tax rebates for the Tampa Bay Lighting and Orlando Magic. Senate bill is similar. Another bill solely targets the Florida Marlins.

Avantair sales tax exemption (445, 286): Tax break for Clearwater aircraft time-share company. Passed House Wednesday, stalled in Senate.