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Republican Leaders Poised To Consider Tax Reforms

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The Tampa Tribune

Published: January 8, 2009

State lawmakers face a daunting task in cutting $1 billion from the state budget in the next 10 days, but it's a task they largely put on themselves.

Democrats in both chambers, as well as some Republicans, such as former Senate President John McKay, have fought for years to convince the majority party of the need to study the state's tax structure. In good times, most Republican lawmakers chose to ignore them, and now that tough times have arrived, difficult choices await.

The burden this week is to focus on budget cuts, but it's good to see the Republican leadership appears ready to finally put tax reform on the table. Lawmakers don't have enough time in special session to properly debate potential reforms, but at least some have hinted change is on the way.

"The gravity of the current fiscal situation is clear," said Sen. Jeff Atwater, R-North Palm Beach. "We are simply spending money we do not have."

Lawmakers learned Monday that holiday sales tax revenue was $100 million less than expected. By June, the budget may face as much as a $4 billion shortfall.

The people of Florida have long understood the state can't run forever without raising new revenue. No one wants higher taxes, but neither does anyone wish to do away with essential and special services the government has promised to Floridians. Simply cutting their way to prosperity doesn't work.

Fewer taxes, smaller government and more freedom is a wonderful guiding premise, but it should not preclude lawmakers from devising ways to meet government obligations. Simply cutting programs and raiding trust funds to balance the budget is not good government.

Lawmakers need to take measure of what kind of state they want to lead.

Cuts are surely coming to social services - nursing homes, disability programs, hospitals. While there may be some fat in the system - certainly there have been too many instances of Medicaid fraud - these are commitments the state has made to the most vulnerable among us. Do Floridians really want to live in a state where we turn our backs on the elderly, the sick, the disabled?

Local schools face a 2 percent cut in the next week, while universities will likely take a 4 percent hit. The numbers don't look so bad until you consider that school and university budgets have already been trimmed by millions this year. And remember investing in higher education is critical to attracting high-paying, high-tech companies to the state.

Lawmakers promise to increase fines for traffic violations and speeding. The $5 and $25 hikes, respectively, would cover previous cuts to the court system.

But come the regular session this March, they must consider what was once anathema: limited tax increases. Our fiscal problem stems in part from a structure that depends primarily on sales and property taxes. There should be some diversity, which can be accomplished without even talking about a personal income tax.

Admittedly in an economic downturn, increasing taxes must be done with care. But a $1 increase on a pack of cigarettes or a bottle of liquor ought not to be off limits. Florida's current per-pack tax of 33.9 cents is among the nation's lowest and has not changed since 1990.

Similarly, lawmakers should look at capturing taxes from Internet sales. And they should approve Gov. Charlie Crist's compact with the Seminole tribe that would bring more than $100 million to the state coffers from the tribe's gambling enterprises.

They must also study the state's tax breaks for companies and products. There are some 240 exemptions - many worthwhile - from which the state could raise an additional $12 billion if the tax break is removed.

In the face of Florida's fiscal crisis, the GOP's hard line against tax increases should give way in order to pay for programs to help the most vulnerable while at the same time covering the essential services demanded of the state. The Republicans can stay true to their convictions and still make pragmatic choices.

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