Politics

State House, Senate diverge on tax plan

Yet again the Legislature finds it can't agree on how to fix property taxes.

By ALEX LEARY and STEVE BOUSQUET, Times Staff Writers
Published October 17, 2007

State Senator Mike Haridopolos listens to a concern from State Senator Steven Geller during a meeting of the Senate Finance and Tax Committee. Haridopolos is the chairman of the committee. In the background is State Senator Ted Deutch. The tax cut progress slowed Tuesday as more questions were raised by Democrats and Republicans.
	[Scott Keeler | Times]

TALLAHASSEE - Florida's latest property tax cut plan flirted with disaster Tuesday as House and Senate committees raced in different directions and passed bills with mismatched parts.

A Republican-controlled House committee offered two dramatic changes that would:

-Extend the 3 percent Save Our Homes cap to all nonhomestead properties, despite a lack of detail on the cost.

-Cut the school portion of property taxes in half, but pay for it by increasing the sales tax by 1 cent.

Either provision could be a deal breaker in the Senate - which did some tinkering of its own by slashing a property tax break for poor seniors, setting up a clash with the House.

The maneuvering threatened to tear apart what days ago looked like a deal that was the product of polite arm twisting by Gov. Charlie Crist.

Having failed before to pass a property tax plan, and with a second plan rejected by a judge, lawmakers are under intense public pressure to get it right - and time is running out.

They have until the end of the month to get a proposal on the Jan. 29 presidential primary ballot. If the session collapses in the next 48 hours, lawmakers risk infuriating voters demanding action on taxes.

"I think it's pretty sad that as Republicans we're fighting over tax cuts," said Sen. Mike Fasano, R-New Port Richey.

Democratic support is vital to putting a proposal on the ballot, and there were abundant signs of disapproval Tuesday. Democrats complained about a lack of information, unexpectedly deeper cuts to school budgets and the speed at which things were moving. "The faster we go, the behinder we get," said Rep. Joyce Cusack, D-DeLand.

As the day wore on, the debate resembled more of an intramural conflict between Republicans in the House and Senate, reminiscent of last spring when the property tax debate began.

Once again, the House pushed for deeper tax cuts. A committee first voted Tuesday to expand the 3 percent Save Our Homes assessment cap to all property, including businesses and vacation homes.

Extending the cap would equalize the tax burden between homestead property owners and others. But it also could create inequities between new and old businesses - not unlike the disparity Save Our Homes has created between new and old homeowners. It also could lead to higher tax rates as cities and counties seek additional revenue.

Senators are keenly aware of the dangers of losing grip on another proposal.

That the Legislature is even back in Tallahassee is a reflection of a court decision last month throwing out their "super" homestead exemption plan due to what a judge called misleading ballot language.

Amid fears of the session imploding, Republicans got a pep talk from their leader, Speaker Marco Rubio of Miami.

"My fear is not that we pass this amendment. At the end of the day, it will help people," Rubio said of the plan to double the $25,000 homestead exemption, allow people to carry the accrued Save Our Homes benefit when they move and create a 25 percent tax assessment for first-time home buyers.

"My fear," Rubio continued, "is that when we are done here next week or this week or whenever, that people will say we're done with property taxes."

But after his speech, the House Policy and Budget Council voted to include a 1 cent sales tax increase in order to cut school property taxes by nearly $4-billion a year. The average property owners' tax bill would drop by 15 to 20 percent, Republicans said.

Rubio floated the idea earlier this year only to meet a roadblock in the Senate. Then, as now, senators view it as a tax increase, a regressive one at that.

House leaders said they were serious about pursuing a 3 percent cap and the school tax break.

Democrats watched with amusement, casting the moves as posturing. "All we're missing is John Belushi shouting 'Toga party,'" joked Rep. Dan Gelber, D-Miami Beach.

Two floors up, a Senate committee made a key change of its own. It limited a property tax break for poor seniors to the first $100,000 of a home's value after concluding the original, 100 percent exemption would take too much money from schools and encourage people to lie to qualify for the exemption.

If the House agrees, the $2-billion impact on schools could be cut nearly in half, according to rough Senate estimates.

That may allay Democrats' concerns about school funding. But some House Republicans were incensed. "What they have in their bill right now is not acceptable," said Rep. Carlos Lopez-Cantera of Miami.

One of the Legislature's most respected Republicans attacked the tax cut plan as highly unfair to small, rural counties that have limited property tax revenues.

"Inequitable and disproportionate," said Rep. Joe Pickens, R-Palatka. He cited wildly differing impact on small counties' property tax bases: 2 percent less in wealthy, coastal Walton County and 16 percent less in poor, rural Holmes County.

"I'm sorry," Pickens said. But he voted for the tax package anyway, saying he hoped the problems would be worked out today.

[Last modified October 16, 2007, 23:34:51]