Perspective

The tasks of the tax force

Times Tallahassee Bureau Chief Steve Bousquet explains why the tax commission job is both important and hard, set against the state's low-tax history and the current looming budget crisis. Here's what to watch for.

By STEVE BOUSQUET, Tallahassee Bureau Chief
Published January 13, 2008

ADVERTISEMENT [Scott Keeler | Times] The tax commission is supposed to take both a long and different view, rather like looking up at the Old Capitol dome when so many politicians keep their eyes focused straight ahead on the nitty-gritty of the here and now.

The long view

Florida's part-time Legislaturelurches from crisis to crisis, constrained by its annual 60-day timetable, a lack of vision exacerbated by term limits, and the political pressures of the next election. Comprehensive tax reform has proven much too daunting a task for legislators.

The taxation commission is expected to be free of those shackles, so that its members can peer beyond the political horizon and act decisively. But after nearly a year of deliberation, it's still too soon to tell if they will.

The 25 members were appointed by Gov. Charlie Crist, Senate President Ken Pruitt and House Speaker Marco Rubio, all of whom are Republicans. Crist chose 11 members and the other two appointed seven each.

Eight members are former legislators, including two former Senate presidents. Chairman Allan Bense of Panama City is a former House speaker.

But if the panel is a reflection of anyone, it's former Gov. Jeb Bush. Six appointees were employed by him or appointed to high-level posts during his two terms as governor.

After holding hearings around the state, the tax panel now meets practically every week. Like local officials, members must comply with the Sunshine Law, and can only discuss public business with each other in public meetings. They serve without pay.

But while the panel is dominated by Republicans with strong ties to the overlapping worlds of business and politics, arguments over tax policy, and competing visions of Florida's future, don't always fall along partisan lines.

The history

The commission's focus on Florida's tax system comes as Florida faces its most severe budget shortfall in two decades. The Legislature is facing having to cut $2-billion from next year's base budget, and is considering abolishing or consolidating some state agencies to save money. The economic downturn that is forcing those cuts is expected to last well into 2009, state economists predict.

Florida's fundamental tax structure is unchanged since 1949, when then-Gov. Fuller Warren imposed a 3 percent sales tax on many consumer items, from restaurant meals to appliances to cars. The major exemptions are for groceries, medicine, and residential electricity. The statewide tax is now 6 percent, but with local options it can be as high as 7.5 percent.

The previous tax reform commission 1990-1992 didn't accomplish much and wasn't around very long, either. The panel voted to put three amendments on the 1992 ballot, two of which passed. One put a so-called Taxpayers' Bill of Rights in the statute books and the other required a 72-hour cooling off period before legislators take a final vote on the annual budget. A third proposal, expanding the rights of cities and counties to increase the sales tax, went down to defeat.

A few months before the election, legislators slashed the commission's budget by 85 percent, stripping the panel of any ability to promote its proposals. "The messenger was shot," Chairman Tom Rankin said at the time.

A tax crusade

One man to watch to gauge the commission's direction is John McKay, a Republican businessman from Bradenton who is tireless when it comes to taxes. He is passionate about changing the sales tax system so that homeowners would pay less and businesses would pay more.

McKay, a former Senate president, devoted his two-year term to trying to convince a skeptical Legislature and governor that tax exemptions for many specific items and services (bottled water, charter fishing vessels), and the exclusion of most services from tax (accounting, legal services) is unfair to most taxpayers and bad for the state's fiscal solvency.

Having failed to do so as a senator, McKay is persisting in pushing for major tax law changes. He would eliminate about $9-billion annually in property taxes collected to run schools, and recoup that money by eliminating some as-yet unspecified exemptions and taxing some services (the Legislature would decide which ones).

Once again, McKay and his tax crusade may falter. He must convince 16 of 24 colleagues to put the proposal before voters in November. It's a very tall order, especially since the commission has strong representation from the business community.Reform ...

The commission's middle name is reform - a loaded word that means different things to different people. That's why commission members have proposed a wide variety of proposals, such as:

- Changing the start of the annual legislative session to January from March.

- Changing the requirements of the class size amendment that voters enacted in 2002.

- Seeking a consistent source of money to reduce the rate of recidivism, or repeat offenders, in the prison system.

- Requiring the Legislature to review all existing sales tax exemptions by 2010.

- Requiring that Floridians pay sales tax on items bought over the Internet, just as the same sale would be taxed in a retail store.

Taxing Internet sales is a good example of a proposal that has repeatedly been blocked in the Legislature, largely because of fears by lawmakers that they could be attacked by opponents for "taxing your PC." But the proposal remains a priority of the influential Florida Retail Federation, and it now appears to be gaining momentum.

So buy that tax-free DVD on the web now - while you still can.Deadlines

The commission's most important deadline is May 4. By that date, any proposed constitutional amendment requiring voter approval must be on file with the secretary of state to qualify for the Nov. 4, 2008, ballot.

Then, by law, any proposal that reaches the ballot must be supported by at least 60 percent of voters to take effect. And that won't be easy.

"Anything that has a significant impact on public policy that tends to pit one group against another is probably going to have a very hard time getting 60 percent," Bense said. "That's a high threshold."

Bense notes that the commission can also propose tax changes for the 2010 ballot, but the commission will run out of money before it runs out of time.

It has a budget of $1.6-million to pay for staff and overhead through June 30, when the fiscal year ends. Only a new appropriation by the Legislature in the spring 2008 session would keep the commission alive on July 1, but the prolonged economic slump will require deeper spending cuts.

Steve Bousquet can be reached at bousquet@sptimes.com or (850) 224-7263.

When itcomes to taxes, they are the 25 most influential Floridians you never heard of.

They are the members of Florida's Taxation and Budget Reform Commission, a panel created only once every two decades to study the state's tax code. They have power. They can put proposals directly before voters on the November 2008 presidential election ballot. - If they wanted to, commission members could push for a state income tax, call for changes in the Save Our Homes assessment cap, or suggest wiping out some of the scores of exemptions to the sales tax. To give voters a say requires a two-thirds vote of its members - 17 of 25. - On the other hand, they could also become paralyzed by their internal political differences, which are many, and end up doing little or nothing of substance. - This high-powered group demands public attention because it represents the last, best opportunity for the next 20 years to scrutinize Florida's system of taxation, and how well it will continue to meet the needs of the soon-to-be third largest state. Meet the members, below, and learn more about the tasks of the tax force.

1. ALLAN BENSE (Chairman), 56, Panama City

Occupation: Building and road contractor Key fact: Speaker of the Florida House of Representatives from 2004-2006.

2. HOYT "BARNEY" BARNETT,64, Lakeland

Occupation: Vice chairman, PublixKey fact: A former chairman of Florida TaxWatch and the Tampa Bay Partnership

3. MARTHA BARNETT, 60, Tallahassee

Occupation: Lawyer, lobbyist

Key fact: Former American Bar Association president and partner at Holland & Knight (2007 clients included IBM, Mayo Clinic, Girl Scouts).

4. MARK BOSTICK, 53, Winter Haven

Occupation: president, Comcar Industries, a trucking firm

Key fact: A Polk County business leader active in Associated Industries of Florida (AIF).

5. TALBOT "SANDY" D'ALEMBERTE,74, Tallahassee

Occupation: lawyer

Key fact: A former Democratic legislator, former American Bar Association president and president emeritus of Florida State University.

6. MIKE HOGAN, 58, Jacksonville

Occupation: Duval County tax collector

Key fact: A former BellSouth executive who served in the state House and on the Jacksonville City Council.

7. JULIA JOHNSON, 45, Windermere

Occupation: lawyer

Key fact: President of Netcommunications, a telecom firm, she was a Jeb Bush appointee to the Public Service Commission for seven years.

8. BRUCE KYLE, 38, Fort MyersOccupation: Circuit judge

Key fact: A former prosecutor and state legislator who served four of his eight years in the House as its chief budget writer.

9. CARLOS LACASA, 44, Miami

Occupation: Lawyer

Key fact: A former House budget chairman, he works for the law firm of Ruden McClosky, which has a heavily local government lobbying practice in South Florida.

10. PATRICIA LEVESQUE, 36, Tallahassee

Occupation: Executive director, Foundation for Florida's Future

Key fact: Served as an education policy adviser to Gov. Jeb Bush, who created the foundation to advance his ideas on education.

11. ALAN LEVINE, 40, Fort Lauderdale

Occupation: CEO, North Broward Hospital District (resigned Tuesday for new post in Louisiana)

Key fact: Under Gov. Jeb Bush, he ran the state Medicaid program as secretary of the Agency for Health Care Administration; once ran unsuccessfully for a Pasco County House seat.

12. ROBERTO "BOBBY" MARTINEZ, 54, Coral Gables

Occupation: Lawyer

Key fact: An ally of Gov. Charlie Crist, he ran Crist's transition team following the 2006 election and is a former U.S. attorney.

13. JACINTA MATHIS, 51, Orlando

Occupation: Lawyer.

Key fact: Served on the 1997-98 Florida Constitution Revision Commission.

14. JOHN McKAY, 59, Bradenton

Occupation: Commercial real estate broker

Key fact: As Senate president from 2000-2002, he tried without success to require a review and possible elimination of sales tax exemptions.

15. BOB McKEE, 58, Leesburg

Occupation: Lake County tax collector

Key fact: A longtime local government official, he is a former Lady Lake town manager.

16. LES MILLER, 56, Tampa

Occupation: director of community affairs, University of South Florida

Key fact: A Democratic legislator for 14 years, he served as minority leader in both House and Senate; ran for Congress in 2006.

17. RANDY MILLER, 60, Tallahassee

Occupation: Executive vice president, Florida Retail Federation

Key fact: A former executive director of the state Department of Revenue, the agency that enforces the tax code, he now lobbies for retail stores.

18. JADE MOORE, 60, St. Petersburg

Occupation: director, Pinellas Classroom Teachers Association

Key fact: The teachers union opposes the property tax amendment on the Jan. 29 ballot.

19. NANCY RILEY, 60, Clearwater

Occupation: real estate agent

Key fact: President of the Florida Association of Realtors, which has donated $1-million to Amendment 1, the property tax proposal on the Jan. 29 ballot.

20. DARRYL ROUSON, 52, St. Petersburg

Occupation: lawyer

Key fact: A former president of the St. Petersburg NAACP, he's running for a seat in the state House of Representatives in 2008.

21. JIM SCOTT, 65, Fort Lauderdale

Occupation: Lawyer, lobbyist

Key fact: Former Republican Senate president (1994-1996) who lobbied for AutoNation, Broward County, and Charter Schools USA in 2007.

22. SUSAN STORY, 47, Gulf Breeze

Occupation: President, Gulf Power Corp.

Key fact: Chairwoman of the Florida Chamber of Commerce and serves on the boards of the James Madison Institute and Florida Council of 100.

23. GREG TURBEVILLE, 37, Tallahassee

Occupation: Lobbyist.

Key fact: Ex-staffer for Gov. Jeb Bush who works for powerhouse lobbying firm of Smith & Ballard.

24. KEN WILKINSON, 63, Fort Myers

Occupation: Lee County property appraiser

Key fact: Considered the father of the Save Our Homes 3 percent annual assessment cap that's revered by homesteaders but reviled by many others.

25. BRIAN YABLONSKI, 40, Tallahassee

Occupation: Vice president, St. Joe Company

Key fact: Was policy director for Gov. Jeb Bush; now serves as a member of Fish & Wildlife Conservation Commission.

How to be heard: For now, the tax commission is getting plenty of public input and it wants more. Public comment can be sent to its Web site, www.floridatbrc.org, where proposals, meeting notices, members' e-mail addresses and other information is available.

[Last modified January 13, 2008, 07:03:14]