Tax reform fight is nothing new

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© St. Petersburg Times
published December 16, 2001

TALLAHASSEE -- It's not a new fight that Senate President John McKay will be picking Monday when he formally announces the tax reform campaign he has spent months preparing. It goes back at least to 1949, when he was one year old.

Some date the beginning even earlier -- to 1924, when Florida chose to chase prosperity by adopting the nation's only constitutional ban on an income tax, or to 1934, when the homestead exemption amendment took most homes of the day off the tax rolls. Business interests led by Ed Ball, the state's most influential industrialist, pushed a sales tax to the House floor in 1935, aiming to make sure the state would never be tempted to tax wealth. That bill failed, 42-51, and did not get to the floor in the Senate. But in 1939 the Legislature gratified timber, phosphate, farming and other land-rich interests by proposing an amendment, which the voters approved in 1940, to abolish the state tax on real estate and personal property.

From that point, the sales tax was inevitable. But what kind? Few exemptions and a low rate, such as McKay now insists? Or a selective tax, riddled with exemptions, at a higher rate?

A sizeable minority of legislators wanted neither, but the 1949 session had enacted a $240-million budget that was $55-million in the red for the failure to pass an array of new special interest taxes that Gov. Fuller Warren had proposed. Warren had no choice but to call a special session, which would likely impose some sort of sales tax.

Inconveniently for Warren, however, he had campaigned against the sales tax, which powerful business interests had been promoting for more than a decade.

"When he speaks against the sales tax, he speaks for your pocketbook," said a typical Warren campaign ad.

Addressing a joint session, Warren relied on the Bible -- "Where there is no vision, the people perish" -- without making a single specific tax recommendation. Legislators correctly took that as a public cue that he would accept, as he had said privately, a limited sales tax. So did the farmers, fishermen, citrus growers and other special interests who set out, successfully, to limit it so that nothing they bought or sold would be taxed.

"At no time or place," declared Sen. John E. Mathews, a Warren floor leader from Jacksonville, had the governor ever opposed or promised to veto anything but a "general" sales tax.

The 3 percent tax proposed by a joint committee exempted such necessities as food, rent, medicine and inexpensive clothing. It acquired more exemptions in the Senate and even more in the House. Newspapers and radio stations were specifically exempted. So were fuels, alcohol, tobacco, automobiles, personal services -- the biggie -- and many more.

Senate sponsors tried to stanch the bleeding by rushing the bill to an early vote and lost, 16-21. The Senate then reconsidered so that more exemptions could pile on.

Sen. LeRoy Collins of Leon County, previously an opponent of the tax, proposed a "sense of the Senate" resolution that the exemptions "are too broad . . . that the tax should have a broader spread and the rate (should be) reduced to 2 percent."

Collins wanted the bill sent back to committee to make the base broader and the rate lower. He lost, 16-22.

The tax has since been become 6 cents on the dollar. Many items that were exempt then, such as automobiles, are taxable now. Even more that were taxed then are exempt now. Fundamentally, however, McKay is walking precisely in Collins' footsteps. He wants to cut the rate by a third -- to 4 cents -- and pay for it by eliminating most exemptions that don't apply to food, medicine, residential rent and utilities or other clear necessities of life.

On final passage, Collins voted for the tax. He explained for the record that "it is imperative that the state have additional revenue to carry forward a progressive program." But he warned, with better vision than Warren, that "this bill has many errors, and will be difficult and expensive to administer." That's truer now than ever: The 337 specified exemptions provide cover for evasions thought to exceed $1-billion a year.

Collins was elected governor in 1954 -- Florida's greatest governor in nearly everyone's estimation -- but he did not try again to reform the sales tax. Gov. Bob Martinez, a Republican, undertook that mission in 1987 when the Legislature agreed to tax services. The reform was quickly repealed under a withering assault from publishers, broadcasters, real estate brokers and other special interests, and the tax rate was raised from 5 to 6 cents. As Martinez had understood, it wouldn't suffice for long.

The 1949 House had also refused to tax newspaper and broadcast advertising. A Jackson County representative named Wankard Pooser explained for the record why he voted yes: "Practically all the newspapers in this state . . . have been ballyhooing and propagandizing for more taxes. They should, therefore, not object to paying their fair share."

A Senate-House compromise tax bill finally passed, 21-14 and 55-33, on Sep. 23, 1949. It was John McKay's first birthday.

Voting against it to the last, Pooser expressed a "fond farewell" to its supporters, "because you are not going to be back."

Many, including Collins, did come back. But not Pooser. He ran for the Senate and lost.

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