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Tax Cuts Without Justice Don't Qualify As Reform

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The Tampa Tribune

Published: December 9, 2007

The state constitution wisely provides that every 20 years, a panel of experts must review how Florida collects and spends our money. This year the re-evaluation has begun with the state voters eager for fundamental change yet confused by a ballot measure that doesn't get the job done.

Many Florida residents of all incomes agree the system is a mess. Some folks are shamelessly overtaxed while the state is running short of revenue. Retirees are leaving for less-expensive towns in other Southern states.

Earlier this year the Legislature and governor mishandled a golden opportunity to rally support for giving Florida a model tax system. Instead of waiting for the thoughtful review necessary to make constructive repairs, Florida's key leaders rushed ahead with a half-baked compromise that will go before voters Jan. 29.

The constitutional changes proposed would solve some tax problems but don't deal with injustices built into the system.

Nor will the changes position the state to raise adequate revenues for the better schools, transportation and other costly improvements required to compete for the best jobs.

Voter approval in January would, among other things, make the Save Our Homes tax shelter portable. That single change would end a major source of dissatisfaction - taxes so low they penalize owners who move.

But the simple solution of allowing people to take up to $500,000 in tax shelters with them to a new property masks the real problem of a tax system out of touch with the people it taxes. The system automatically overtaxes new buyers, eventually undertaxes everyone who stays put, and leaves local taxing boards little incentive to cut millage rates to the minimum revenue needed.

The Taxation and Budget Reform Commission, in contrast, is empowered by the constitution to propose changes without worrying about politics. All 25 members were appointed by either the governor, speaker of the house, or president of the senate, all of whom want the tax amendment to pass.

The commission is considering other, more promising, alternatives. One is to review all sales-tax exemptions with a goal of applying the state's 6 percent tax more evenly. If more things are taxed, the rate could be lower.

A separate approach would take a more aggressive swing at property taxes. A plan backed by a former state representative from Miami, Carlos Lacasa, would, among other things, increase the homestead exemption to 50 percent of a home's value and increase the sales tax by 1 cent for three years so schools would lose no revenue.

Meanwhile, a citizens' petition drive has begun to ask voters to change the state constitution to put a firm limit on property tax collections. The proposal would limit property taxes to 1.35 percent of the taxable value of all property. This change would leave local governments short on revenue, especially counties such as Hillsborough that have additional property taxes for transit, the port, and libraries.

The tax panel is better positioned to offer fixes that make sense.

Florida's property taxes have become an inequitable way of funding government, and along with increases in insurance, have become an obstacle to economic growth and family security.

If the tax commission can find a way to build an upright tax structure atop the warped foundation that gives longtime homeowners both lower taxes now and smaller tax increases in the future, it will have done the state a great service.

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