What to like, what not to like in tax plan
By HOWARD TROXLER
Published June 10, 2007
This deal the Legislature just came up with to cut property taxes in Florida looks interesting at first blush. Second blush, too.
Here is the gist of it:
- A tax cut for everybody, starting this fall. Local governments (except schools) would have to cut by up to 9 percent from this year.
- Future protection for everybody by an annual cap on tax increases. No more huge kicks in the pants.
- Deeper tax breaks in the future for homeowners, as well as a cure for the wacky unfairness of the existing "Save Our Homes" exemption.
The first two things, the Legislature can do in its special session that starts Tuesday. The third would take a statewide election.
There are things not to like. More about the bad stuff in a minute.
But this plan, finalized by the big shots of the House and Senate over the past few days, has a few virtues.
First, it addresses the core problem -- local taxes rising too fast because of property values. It's not just cosmetic.
Second, it helps everybody, not just homeowners. Everybody benefits from the tax cut and the cap on future growth. There are other business tax breaks in there too.
Third, it gets rid of Save Our Homes, which "traps" people in the same house and creates crazy inequality. All homestead owners would get the same kind of exemption.
Fourth, it's not too deep. We don't have to jack up the sales tax to nearly 10 percent to make up for it, as in one earlier proposal.
Okay, here's what not to like.
If you're a hard-core tax cutter, it's not enough. Even a 9 percent cut from this year's level doesn't make up for all the hikes of recent years.
There will be a loophole to let local governments exceed their cap by an extraordinary vote of the elected officials.
It's favorable to homestead owners, who get two-thirds of the savings over the first five years (almost $21-billion of the total cuts of $32-billion).
It hurts schools by giving homeowners bigger tax breaks in the long run. Will the Legislature keep its promise to make up that money?
Even this size of a tax cut means local governments will have to cut something, which might affect important services or programs.
Finally, the numbers came out less than 96 hours before the session. We will have had just three days (including a weekend) to think it over.
In general, this is a broader approach to a big problem than the Legislature took in its January special session on hurricane insurance.
In that case, lawmakers just shifted more risk to the state, asking insurance companies pretty please to come back.
Here, at least, the plan addresses the core causes of the problem at hand (property values, Save Our Homes) and doesn't just pander.
But if you believe the disadvantages outweigh the advantages, then you still have, oh, 48 hours or so before the session starts to try to talk the Legislature out of it.
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The documents on the tax plan are on TroxBlog -- start with the letter to legislators.
This week I'll be in Tallahassee posting updates from the session online. On Tuesday I'll hold a live two-hour chat with readers on the blog about the tax issue.
To find TroxBlog, just click on the "Blogs" link of www.tampabay.com, or type the web address blogs.tampabay.com/troxler.