Perspective

The accidental amendment

By ALEX LEARY, Times Staff Writer
Published November 11, 2007

The looks of House Speaker Marco Rubio and House Democratic Leader Dan Gelber say it all.
	[Scott Keeler | Times]

TALLAHASSEE - The property tax amendment on the Jan. 29 ballot was hastily assembled out of spare parts and leftovers by a Legislature short of time. It's a cautionary tale of power politics.

Give legislators credit for what they initially tried to do. They pondered sweeping changes in the state's property tax structure, produced a thick analysis of the impact, then spent time crafting a plan.

It was imperfect, giving most of the relief to homeowners who least need help. And yet, daring. Over time, some of the tax inequities would have been reversed.

But you won't see that on the January ballot.

Instead, the actual constitutional amendment citizens will vote on - a plan that deeply expands those inequities - was thrown together in a hardball game of politics with events linked by a chain of unintended consequences.

The result is a plan that provides meager savings to the average homeowner and exposes the state to a lawsuit. Still, in the bizarre vortex of property taxes, it is a plan that has a better chance of getting the 60 percent approval.

Here is how this product of the legislative sausage factory ended up on the voters' plate:

- A lawsuit prompted a judge to throw out an earlier tax package, one that - like the proposal or not - at least the Legislature had worked on long and hard. Critics of the plan won what turned out to be a Pyrrhic victory.

- Then, agreement on a substitute plan fell apart. It wasn't because Republicans and Democrats bickered. It was a fight between the House and the Senate.

- To beat Republicans at their own tax-cutting game, a House Democrat proposed a tax break for nonhomestead properties, never dreaming it would pass. But Republicans endorsed it, then were surprised by what they had done.

- The Senate leadership used polls to make bottom-line decisions and removed provisions to help new home buyers and low-income seniors.

What remains? It's hard to know because there is little analysis of the plan that actually passed, a remarkable omission for such a consequential initiative, which would cut property taxes by an estimated $12-billion over five years.

In the beginning

The original plan, crafted during a tense special session in June, was as daring as it was flawed. It would have phased out Save Our Homes, the 3 percent annual assessment cap that has shielded homeowners while pushing more tax burden to businesses and snowbirds. In its place would be a "super" homestead exemption.

The plan was complicated and expensive, taking $15-billion from local governments and schools over five years. Democrats hated it. Unions hated it. Business interests were lukewarm. Polls showed declining support.

Many wanted to see it die, to punt the issue to the Taxation and Budget Reform Commission, a blue ribbon panel convened once every 20 years. The commission would put something on the November 2008 ballot. So defeat in January was a good thing, for many.

"We absolutely thought it was going to fail," said Rep. Dan Gelber, D-Miami Beach. "It was a stink bomb all the way around, and we wanted it on the ballot as quickly as possible."

Then a mayor from Weston in Broward County filed a lawsuit. The ballot language, he argued, would mislead people into thinking they would keep Save Our Homes when they moved.

On a hot afternoon in late September, Circuit Judge Charles Francis ruled in favor of Mayor Eric Hersh. The decision sent the Legislature scrambling. The plan lawmakers had struggled to pass was now a dud. It should have been a sweet victory for Hersh's backers, but time remained for the Legislature to make the ballot deadline.

"We believed in the suit, but it's unfortunate because it gave legislators an opportunity. It was an unintended consequence," said Bob Carver, president of the Florida Professional Firefighters.

This time there would be no bold attempt to phase out Save Our Homes. "You can argue that it's bad policy for the state of Florida, that it's led to some of the problems," House Speaker Marco Rubio said. "But the truth of the matter is, people like Save Our Homes."

Only two weeks remained to make the deadline for the January ballot, but the Legislature's top negotiators were calm. "We're wiser and smarter," said Rep. Dean Cannon, R-Winter Park, as he stepped out of an elevator en route to the office of Sen. Dan Webster. "We know what judges think. We know what people think. So I'm optimistic that it will be a lot easier this time."

Republican leaders adopted the governor's campaign-tested plans to double the homestead exemption and allow people to carry Save Our Homes benefits when they move. A few other provisions completed the package.

For a few days, it looked like Cannon was right.

A game of chicken

Then came Oct. 16.

A Senate committee struck first, easing off a tax cut for low-income seniors because it ate a hole in school budgets. Two floors down, the House Policy and Budget Council was not to be outdone.

Rep. Ron Saunders, D-Key West, is a garrulous 53-year-old with snow white hair and a unique status in the House. He served in the House when Democrats were in power. In 2006, he was elected to a new term, this time taking a back seat to Republicans.

The former appropriations chairman knows the game. So he showed up to the meeting with a plan to cap nonhomestead property assessments at 7 percent annually.

Republicans had longed for a cap. But Rubio had already agreed to an outline of the tax deal with Senate President Ken Pruitt. A cap was outside the agreement.

"I talked to a lot of Republicans and they kept saying 'It's a great idea but we don't think we'll be able to vote for anything because amendments won't be allowed,' " Saunders said. "But I wasn't part of the agreement."

Saunders figured he would throw it out the idea, expecting to be shot down. Seeming to call Saunders' bluff or perhaps seeing the perfect cover, Republicans offered their own hastily written amendment: a 3 percent cap. Was this just a game of chicken? everyone wondered, lawmakers included. But after lunch, the roll was called, and the 3 percent cap passed.

"There was this undertow that everybody wanted to do more and when Ron's amendment came up, it was like yeah, this is what we came up here to do," said Rep. Stan Mayfield, R-Vero Beach.

Before the meeting ended, the committee also passed a 1 cent sales tax increase to cut property taxes that fund public schools.

"Boom!" Sen. Steve Geller, D-Cooper City, balling up his hands then throwing them open, as in an explosion. The property tax deal was crumbling.

Now it was not the usual Democrat vs. Republican. It was House vs. Senate.

The Senate passed its version of the plan; the House passed its own 108-2, trumpeting it as a bipartisan success. Senate leaders were privately furious with Rubio, who seemed at best trying to insert more ideas and at worst, crash the process for his own gain.

The term-limited 36-year-old from Miami has latched on to property taxes as his issue and needs it to stay relevant in his waning months in office. Here was a plan he considered soft, being pushed by a governor some conservatives consider soft.

Rubio seemed to back the Senate into a corner. But the more experienced chamber is not easily outmaneuvered.

Senate President Ken Pruitt turned once again to Webster. Largely in private, Webster got to work. On a Sunday afternoon - the day before the final day of the session - he released a bare-bones all-or-nothing offer to the House: the additional homestead exemption, Save Our Homes portability, a break on business property tax and a 10 percent nonhomestead cap, double what the House plan eventually called for.

Major omissions included the break for poor seniors and a discount for first-time home buyers. That was important because it offset potential constitutional issues with Save Our Homes portability. But the Senate abruptly abandoned the idea. Webster explained that it was not polling well, threatening passage in January.

The Senate passed the plan after three hours of debate, then left Tallahassee. Angry House members decried the maneuver for hours and blasted a lack of fiscal analysis. In the end, the Senate plan passed.

A defeated Rubio summed it up: "We just missed an opportunity," he told reporters the day after the vote. "I don't think Martin Luther King took polls before he led the civil rights movement."

Such is the paradox of the tax plan. It may be worse policy than the one that failed in court yet it has a better chance of passing. The governor said he will "work like the dickens" to promote it, and rightly so: Failure on Jan. 29 would be a major blow to Crist and could encourage challengers such as Rubio, who has already indicated he will get involved in a citizen petition to fight for more property tax cuts.

Success in January could have even deeper consequences.

The Taxation and Budget Reform Commission, appointed by the governor once ever 20 years to make recommendations on fiscal policy, has been studying property taxes and proposals will be released just after the vote. Those questions would go before voters in November 2008.

A yes vote on Jan. 29, though, would only fire up cities, counties and schools to oppose further cuts. The public could also reach a limit with tax cuts and loss of government services, reaching burnout over tax plans.

Allan Bense, chairman of the taxation committee and former speaker of the House, acknowledged the potential problem. "There could be a feeling out there that, 'Well we solved the problem.' "

The amendment

How it would work

If the tax plan is approved, owners of homestead property will get an extra $25,000 homestead exemption. But the break does not apply to school taxes, which make up about 40 percent of bill, so the effect is closer to $15,000.

Homeowners can carry accrued Save Our Homes benefits with them if they move. The mechanism is different depending on the cost of the new home. If they move to a more expensive home, they take all of their accrued benefit, up to $500,000. If they move to a less expensive home, they pay on the same percentage of just value as they did in their old home.

In addition, the rise in assessments for businesses and non-homestead property would be capped at 10 percent.

[Last modified November 10, 2007, 21:02:20]