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Committee OKs State And Local Revenue Limits

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By CATHERINE DOLINSKI, The Tampa Tribune

Published: February 12, 2008

Updated: 02/11/2008 11:45 pm

TALLAHASSEE - Local and state governments may have to live within strict new spending and revenue limits if the Taxation and Budget Reform Commission adopts a proposal that cleared one of its committees Monday.

The proposal by Commissioner and Duval County Tax Collector Mike Hogan would limit spending increases by cities, counties and state to the rate of inflation, adjusted by population or changes in school enrollment.

It would restrict property tax collections to the amounts collected in the boom fiscal year of 2005-06. Property tax increases would be limited to the rate of inflation plus changes in property values from property improvements or other changes.

"Floridians are working nearly half the year just to pay their taxes," said Hogan, a former House member appointed to the panel by Senate President Ken Pruitt, R-Port St. Lucie. "Florida's local and state governments have been experiencing revenue growth like never before, and their spending has escalated."

The tax and spending caps would expand to accommodate any unfunded mandates handed down by the state to local districts. Beyond that, governments would have to appeal to voters, who would have the power to suspend limits on spending or revenue-raising for up to four years. Any new tax, or tax increase, would have to go before voters. User fee increases would require a two-thirds vote by the electorate.

Hogan brought his proposal to the commission's Finance and Taxation Committee, which voted unanimously to send it to the Planning and Budgetary Process Committee. The plan will need approval from the full 17-member commission to reach the November ballot.

The proposal borrows from other states such as Colorado, which since 1992 has had a Taxpayer's Bill of Rights that restricts taxation and spending. The Florida Constitution limits state revenue growth to the growth rate in personal income for the previous five years, but Hogan said that's inadequate. He advocates a two-pronged approach that also limits spending.

Last year, lawmakers passed caps on property tax revenue, rolling back 2007-08 tax rates to 2006 levels, minus a percentage factor based on past tax increases. They restricted future rate increases to growth in population and personal income.

Schools Say More Aid Needed

"It's important to look first at the impact of what has already passed," said Craigin Mosteller, spokeswoman for the Florida Association of Counties. She called Hogan's proposal a "sledgehammer approach."

Wayne Blanton, executive director of the Florida School Boards Association, said he could not imagine how governments will pay for constitutionally mandated class-size caps under Hogan's plan, much less improve Florida's mediocre education rankings. "We are below the average in education in just about every category you can measure. I believe what this does is freeze us there," he said.

The tax and spending restrictions cleared the committee a day before it takes up two plans to overhaul the state's property and sales tax systems.

Sales Tax Ideas On The Table

One package, from Commissioner and former Senate President John McKay, would eliminate the part of property taxes that pays for schools and fill the gap by applying the sales tax to services and eliminating unnecessary sales tax exemptions.

The other, from Commissioner and former House member Carlos Lacasa, would raise the sales tax by one penny to pay for a property tax exemption. Property owners would get to exempt one-quarter of their assessed values from taxation. The current 10 percent cap on yearly assessment increases for nonhomesteaded properties would drop to 5 percent.

After Amendment 1 passed Jan. 29, McKay said he thought his proposal could follow suit because it represents a roughly one-third cut in property taxes for homeowners. Only special-interest groups benefiting from sales tax carve-outs would object, he said.

But Lacasa, an appointee of House Speaker Marco Rubio, R-West Miami, said Monday he thinks his proposal will do better with voters.

"I think the public will see here an immediate stimulus package for real estate, and a long-term solution for spikes in real-estate values," he said.

Reporter Catherine Dolinski can be reached at (850) 222-8382 or cdolinski@tampatrib.com.

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