Crist signs tax bill, and questions start flying

The law is part of a plan to lower property taxes.

Published June 22, 2007

Invoking the sanctity of homeownership, Gov. Charlie Crist on Thursday signed a bill forcing local governments to make immediate budget cuts. He then flew around the state to pitch a second round of property tax cuts that require voter approval.

"Nobody should really complain about this at all," Crist said. "Nobody."

But even as the governor embarked on the public relations campaign, the complaints began.

The Florida Association of Counties said the regulations Crist signed into law "erode Florida's Constitution," which reserves for cities and counties the right to raise revenue though property taxes.

The Legislature, the argument goes, does not have the authority to order local governments to roll back their property tax revenue and cap further increases.

An analysis by a law firm representing cities in South Florida argues that the Constitution allows the Legislature only to set a maximum millage local governments can levy, currently 10 mills for cities and counties.

The bill ordering a rollback in revenue, the analysis says, is unconstitutional because local governments would be restricted from taxing up to the 10-mill limit.

A provision in the law allows governments to break the cap through a supermajority vote or a referendum. But lawyer Jamie Alan Cole argues there is no time this year for a referendum because budgets are already being created.

"There are a lot of legal questions," said Cole, of Weiss Serota Helfman Pastoriza Cole & Boniske in Fort Lauderdale.

Constitutional law experts contacted by the Times had differing opinions on the law firm's analysis.

"It's absolutely legally correct," said Stetson University College of Law professor Howard Fink.

University of Florida law professor Joe Little disagreed, saying the Constitution does not prohibit the Legislature from further restricting millage rates as long as it does not affect the overall millage cap.

Longtime Pinellas County Attorney Susan Churuti agreed with Little, and pointed to other provisions in the Constitution overriding home rule, but said the case can be argued.

"I certainly don't think it would be unethical to file a challenge," she said. "It could be well-founded, and it could be successful."

Barring a successful legal challenge, the millage rollback and tax cap will take effect with the budgets governments are now putting together. Over the next five years, they are expected to take $15-billion out of local coffers. The rollback and cap affect all property owners.

The second part of the tax plan is a proposed constitutional amendment that goes to the voters on Jan. 29.

It would expand the homestead exemption from $25,000 to a maximum $195,000 on $500,000 in value, while allowing people to retain their existing Save Our Homes break on assessments if that saves them more money.

The millage cap and rollback, approved last week by the Legislature, and the homestead exemption, which needs voter approval, are independent, legislators and their staff insist. But some language in the proposed constitutional amendment is causing a stir.

It would "require the Legislature to limit the authority of counties, municipalities and special districts to increase ad valorem taxes."

"It makes you wonder why they put it in there," Little said, because it can be interpreted as an after-the-fact ratification of the Legislature's ability to force local governments to roll back and cap taxes.

Cole argues that the only way the rollback and cap is valid is if the amendment passes with that clause intact.

But one of the main negotiators behind the tax deal, Sen. Daniel Webster, R-Winter Garden, said the language is merely to ensure future legislatures do not remove the cap without going back to the voters to amend the Constitution.

"It would take away our prerogative of removing the cap at a later date," Webster said. "It wasn't to give us the permission to do it. We already have that."

When asked if it had a dual, if unintended, purpose of alleviating constitutional concern about the tax rollback, he replied, "I don't want to get into that."

Jill Chamberlin, a spokeswoman for House Speaker Marco Rubio, R-Miami, also was hesitant to discuss potential legal strategy.

"House and Senate members and staff worked to craft the language in the statute and the proposed amendment to accomplish the Legislature's goal of property tax relief and reform in a manner that is legal and constitutional. We believe those goals were accomplished," Chamberlin wrote in an e-mail to the Times.

If there is room for a challenge, who will step up?

While Cole's analysis has been circulating among city and county officials, no one so far has been willing to act. Police and fire unions, which fear cuts will lead to job cuts, said they have no plans at this point to sue.

Driving to an event in Miami to tout the tax cuts, Gov. Crist was told of the possible legal challenges and commented: "It's amazing to me how they will fight the will of the people so hard. You know, change is coming. Taxes are going down."

Times staff writer David DeCamp contributed to this report