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Legislators helped poor cities ... and Miami

The city was on a list of rural towns exempt from cuts. It was a mistake, they say.

By AARON SHAROCKMAN and ALEX LEARY
Published July 13, 2007


TALLAHASSEE - Buried inside the 69-page tax reform bill the Legislature passed last month is a paragraph that exempts dozens of city governments from the harshest state-mandated budget cuts.

They were the cities, mostly small and poor, that could not easily endure the deep tax cuts that would face their larger, more prosperous counterparts, legislators said. But one city on the list of more than 100 is neither small nor poor.

Miami.

At June's special session on tax cuts, legislators say they thought Miami would have to cut property taxes a whopping 9 percent this year.

But when a final list came out, Miami was instead grouped with tiny towns like Sneads, Noma, Altha and Pahokee. Aside from a basic rollback to last year's revenue levels that all cities must accept, Miami no longer faced a steep 9 percent cut. Now, the percentage was zero.

The explanation: Somebody made a mistake, House Speaker Marco Rubio said Thursday.

The fix: Rubio said he will ask the Legislature to reverse the exemption next year.

The cost to Miami's 380,000 citizens: $23-million worth of tax cuts this year.

Miami's situation appears to have been lost in the commotion surrounding the June special session and the secrecy behind the details of the tax legislation.

An original analysis provided by legislators to cities, the media and the public said Miami would be required to make some of the state's deepest cuts.

But that analysis was wrong, a spokeswoman for Rubio says.

Instead, the legislation actually exempted Miami under the notion that it had been in a financial crisis more than five years ago. The bill established an arbitrary cutoff date that included Miami by a matter of months.

"Somehow Miami squeaked by," said state Rep. David Rivera, R-Miami. "I don't know anybody who's happy with the exemption."

While Miami was escaping a financial calamity that had forced the governor to intervene in 2001, the city today is thriving by all measures, collecting more than $255-million in property taxes this year.

Rubio said legislators did not realize Miami was matched with places like Paxton, population 753, Madison, population 3,195, and Crestview, population 19,500, until the special session floor debate. By then, he said, it was too late.

Rubio, who represents a portion of Miami, said Thursday he would try to have the city's exemption revoked when the Legislature next meets.

"Their emergency was self-induced and a long time ago," Rubio told the Times after it questioned the deal. "The people of Miami deserve a tax cut."

Miami Mayor Manny Diaz, meanwhile, says he did not lobby for the break, but is not yet volunteering to give it up.

"There's a policy decision made somewhere by someone," Diaz said. "Cities in bankruptcy in the last five years needed some special consideration in coming back. From a policy perspective, I understand it. But it's not something I came up with."

The city still will have to make cuts, Diaz said, since Florida cities cannot take in additional property tax dollars next year. He estimated the city could lose 12 to 15 percent of new tax revenues.

Rubio said he would pressure Miami city commissioners to make the additional budget cuts anyway. Diaz said he has not heard from the speaker.

"People have this notion that we're somehow exempted from any kind of tax relief," said Diaz, a registered independent first elected in 2001. "We're going to lower our millage rate, we're required to. We're not getting a free pass."

St. Petersburg Mayor Rick Baker, who was in Miami attending a global warming summit, would not say if Miami deserved a special exemption. Baker has to cut an additional 5 percent from the city budget.

"I'll let you make that judgment," Baker said. "But I think I counted 30 construction cranes coming in."

Crist said Thursday he had not made up his mind and wanted to examine the issue.

Miami stands out for another exemption, this one fought for by Rubio.

In the last moments of the special session, Jackson Memorial Hospital in downtown Miami was spared an estimated $24-million in tax cuts.

About 35 hospital taxing districts in the rest of the state, which provide similar care to the uninsured, were included in the bracket of 3 percent cuts after a rollback.

"It raised my eyebrow a bit," said Alan Levine, a former state official who is now chief executive of the North Broward Hospital District.

Levine said his district has voluntarily moved to cut taxes but the state-ordered cut would add several million to its losses.

Rubio and other Miami-Dade lawmakers pressed for the exemption in the last moments of the special session. They argued Jackson Memorial is a different case because it gets funding from the county and is the state's largest provider of care for the poor.

Rep. Susan Bucher, D-West Palm Beach, said she fought for all hospital and health care districts to be exempt but was "shut out" by leadership.

"Many of us support Jackson's actions, but they shouldn't have been the only one who got exempted," Bucher said. "When you are in charge, you can do anything you want. I guess it's convenient that the speaker comes from Miami."

Rubio said the hospital exemption put Jackson Memorial in line with other hospital districts. When it comes to Miami politics, he says it's not about playing favorites.

If it were, he would side with the taxpayer, Rubio said.

"What people need to understand, if there's some thinking of a special deal, I have eight cities in my district," he said. "I have more people in Hialeah than in Miami. I don't have a politically pleased crowd right now."

Times researcher Carolynn Edds and staff writer Craig Pittman contributed to this report. Aaron Sharockman can be reached at asharockman@sptimes.com or (727) 892-2273.