Tax cuts put off the tough work

By A TIMES EDITORIAL
Published June 17, 2007

With Gov. Charlie Crist cheering them on, state legislators took just three days last week to embrace fundamental changes to property taxes with little regard for the long-term consequences. Now it will be up to local governments and voters to make more deliberate, thoughtful decisions about providing tax relief without doing serious damage to public safety, education and the overall quality of life in Florida.

The first challenge will be coping with the Legislature's decision to become everyone's mayor and county commissioner by dictating a property tax rollback and additional revenue cuts of up to 9 percent. The difficulty of meeting the targets will vary by city and county, but the spending cuts can be expected to touch popular services and programs. While legislators bragged that the tax cut will give parents more money to cover the costs of summer camps or Girl Scouts, they ignored the reality that families also could see reduced hours at city pools, parks and libraries.

Local officials have an obligation to cut the fat first. If they still are faced with cutting police and fire services, they can avoid some of the required tax cuts by an extraordinary vote. To vent their anger with the Legislature by going after the most vital services and programs would be irresponsible and unfair to residents.

From a policy perspective, there are many faults with Tallahassee imposing arbitrary tax rollbacks and spending caps on local government. Yet this tax rollback and spending cap received bipartisan support, and they are not as severe as they could have been given the antitax fever in the Capitol. It won't be clear for weeks whether the relatively modest tax cut will be worth the reduction in services it will require, but it will be up to local governments to make the trade-off as painless as possible.

Far more concerning is the constitutional amendment lawmakers placed on the Jan. 29 ballot to create a new super-homestead exemption. The concept has some merit. It attempts to be progressive with a two-tiered approach, exempting 75 percent of the first $200, 000 in home value and 15 percent of the next $300, 000. And it would go a long way to help homeowners avoid tax shock when they move. Eventually, it could replace both the $25, 000 existing homestead exemption and the popular but flawed Save Our Homes break. The 1992 constitutional amendment that capped increases in assessed values on homesteads at 3 percent has been a large factor in the current crisis, creating huge inequities among owners of similar homes and shifting more of the tax burden to business, investment properties and recent home buyers who are unprotected from high tax bills fueled by soaring property values.

But the significant problems with the new amendment were exposed in the partisan debate in the Legislature. It does not help the taxpayers who need the most help, and it would force even deeper spending cuts on local government. It lost some of its allure as a way to get rid of Save Our Homes when Republican legislators didn't have the nerve to force homeowners to switch to the super-homestead if they would save money immediately. If the amendment passed, homeowners could choose to keep Save Our Homes until they moved.

Most distressing is the failure of Republicans to say how they would replace billions in property tax revenue earmarked for public schools that would be lost if this amendment passes. Vague promises to hold education harmless are not nearly good enough in a state where tax revenues are growing more slowly, universities are bursting at the seams, the backlog of infrastructure needs is long - and the governor and the Legislature are allergic to tax increases.

Despite these concerns, Republicans rammed this amendment through the Legislature in less than a week. Fortunately, voters now have seven months to reach a more responsible decision.

[Last modified June 16, 2007, 21:52:05]