April 04, 2008

New optional tax for community colleges goes to the ballot

Three down and six more to go. The Taxation and Budget Reform Commission approved 23-1 a plan to ask voters to give counties the ability to raise the local sales tax to improve community colleges.

Under the proposal by Commissioner Roberto Martinez, counties could put a referendum before voters that raises either sales taxes to pay for community college development. The additional sales tax would sunset after five years, unless it is re-enacted. Commissioners removed from the proposal the additional option to allow for a similar referendum to raise property taxes for community colleges instead of a sales tax.

The committee heard from business leaders and community college officials who supported the proposal. Miami Dade Community College President Eduardo Padron called it the "most democratic'' of the proposed amendments before the commission.

"Rather than a mandate, it provides people to have choices...to make a difference for the welfare and the promise of their prospective communities.''

Commissioner Susan Story called it a good deal for Florida. "If you look at statistics, over the next 10 years in Florida, 60 percent of the jobs in Florida are going to require postsecondary education, but not necessarily four-year degress,'' she said. "Our economy cannot stand not to continue to support community college. They make a little bit of money go a long way.''

Commissioner Richard Corcoran was the sole no vote. Commissioner Bruce Kyle had left the room.

Conservation tax breaks yes; sunset taxing districts no

The Taxation and Budget Reform Commission has voted on two of the 9 proposed constitutional amendments this morning and killed one and approved another.

The winner: a proposal to create a new taxing class known as conservation to give land owners who want to protect their land from development to receive the same tax breaks as agricultural land. Opponents said the measure, by Commissioner Brian Yablonski, vice president for public affairs at St. Joe Company, would benefit big land owners like St. Joe Company.

Commissioner Sandy D'Alemberte warned that the same abuses of the agricultural land exemptions could emerge with this in which after holding land as agricultural "they overnight take the development and change its use.'' D'Alemberte voted against it.

Propopnents said it was needed at a time when the state didn't have money to preserve land from development. "This is a way for Florida to work with landownhers to accomplish the same goal without having to buy the property,'' said Commissioner Randy Miller. Download yablonski_conservation_amendment.pdf

The loser: a plan by Commissioner Nancy Riley to require any future independent taxing district created to have a 11-year life unless voters re-authorize it. Riley, a realtor, said it was needed to prevent government from establishing special taxing districts to get around tax caps imposed by the legislature and any future tax restrictions approved by voters.

Opponents warned it would hamstring local communities and make it impossible for them to obtain long-term financing for things like airports, children's health programs and community development. Vivian Alarcon of the Children's Services Council said the 7 independent taxing districts that provide health services, education and child care to children in their earliest years couldn't function if they "had to go into campaign mode.''

The measure failed 11-14. Download riley_taxing_districts_amendment.pdf   

April 03, 2008

Tax panel clarifies: no raising sales tax 2-3 cents

The Style and Drafting meeting of the Taxation and Budget Commission continues meeting today and decided to clarify what they meant when they said the legislature has four options to replace $9.6 billion in school property tax revenues with sales taxes and other options.

The first thing they want to make clear: the notion that it's okay for the legislature to replace the lost revenue with 2 cents or 3 cents -- as some lawmakers are suggesting -- is totally wrong.

"I don't think the language will allow them to do that directly,'' said Commissioner Martha Barnett, a lawyer.

"All I want to do here is make sure it just has to be a combination of one or more of these as opposed to all of them,'' said Commissioner John McKay, lead sponsor of the measure.

Patricia Levesque, the other prime sponsor, described her intentions: "What we were going to made the Legislature do is eliminate ad valorem taxes and replace the money. I had no intention of restricting from from doing what they can do now.'' She noted that if the Legislature wants to raise the sales tax two to three cents, it can but not because of this amendment. "They have a lot of flexibility,'' she said.

"I'm not sure that was made clear,'' said Dudley Goodlette, the commission's legal council. "I don't think that was calculated as a limitation."

The committee agreed to clarify the language to read that the four options used to replace the repealed property taxes are options, not requirements, so they will replace "and" with "or."

April 02, 2008

Hogan gives up on refining tax cap; new version hands over job to legislature

Taxation and Budget Reform Commissioner Mike Hogan has spent the last two weeks drafting and redrafting his plan to put a TABOR-style government revenue cap on the November ballot. He postponed a vote last week to give him time to find a compromise to keep it alive.

Today he's found it: remove all the details -- from what revenue is included and excluded to what governments get covered -- are removed from the constitutional amendment and the proposal now just asks the almighty Legislature to work it all out. It's the same sort of hand-off that Commissioners John McKay and Patricia Levesque used when they crafted their hybrid plan to replace all property taxes for schools with a plan to increase sales taxes.

Here's Hogan's latest draft: Download hogan_substitute_amendment_40208.pdf.

April 01, 2008

Property tax challenges to get easier under House bill

Property owners who challenge their property appraisal and lower their tax bill will have the benefit of the doubt under legislation passed Tuesday by the House Policy and Budget Council.

The bill, by Rep. Dean Cannon, R-Winter Haven, changes state law to lower the standard by which property owners can challenge their tax bill. Economists estimate it will reduce tax collections by $135 million statewide in the 2008-09 budget year, including $37 million collected for schools, and reduce tax collections by $724 million in 2012.

"Regardless of what the fiscal impact is, these are inappropriately high, or ill-gotten gains, in tax that never should have been taxed,'' Cannon said.

The 25-member Taxation and Budget Reform Commission studied a similar provision and unanimously recommended the legislature make the change this session. It requires property appraisers to use profesionally accepted appraisal practices and lets property ownerse prove them wrong with a lower standard than present law -- from "clear and convincing evidence'' to the "preponderance of the evidence.''

While Broward Property Appraiser Lori Parrish supported the change, property appraisers from smaller counties opposed it, warning that the change tilts the system in favor of large property owners.

The council approved a similar measure to put the change before voters in November through a constitutional amendmnet but the proposal, by Rep. Frank Attkisson, R-Kissimmee, does not have a Senate companion and is not expected to get the two-thirds vote to make it to the ballot. 

House readies tax cap for ballot if TBRC doesn't

The House Policy and Budget Council has postponed for a week debate on the tax cap, known as the Taxpayer's Bill of Rights amendment, to see if the Taxation and Budget Reform Commission comes up with the votes on Friday to do it.

The idea, also known as the TABOR plan, would limit all government spending to a formula that includes the cost of living plus growth and one percentage point. The powerful tax panel last week postponed the measure until its last meeting, Friday, April 4. Sponsor Mike Hogan has watered down the proposal and observers say it's in trouble.

House Speaker Marco Rubio said he wants the TBRC to do it but "we need some form of growth limitation in place'' and he wants "to be respectful of the time they put in and the work that they've done.''

"I hope they can come to a resolution on it. If they can, that work is done. If they can't, we'll have to re-examine what will happen,'' he said.

Rubio predicted that the tax panel vote on Friday "will be close.''

"There are folks that would prefer there be nothing else on the ballot but what we passed,'' he said. "They're afraid if this passes it'll weigh down the other questions. But I think these are important issues that ought to be done this year.''

Among the other proposals on the ballot is the tax swap Rubio pushed to replace property tax money that pay for schools with sales tax increases.

As for timing of the tax cap in an economically crippled year: "It's the ideal year,'' Rubio said, "because it's a year that reminds us had we had one in place, we wouldn't  be going through these budget cuts right now. Had government been limited in its growth, we wouldn't have to do the reductions in spending that we're doing this year."

March 28, 2008

Tax commission snagged on words over tax swap plan

What happens if the proposed constitutional amendment you vote on isn't as artfully drawn as the alternative you didn't approve? And if you replace one with the other does that set you up for a legal challenge?

Those are the questions the Style and Drafting Committee of the Taxation and Budget Reform Commission are grappling with Friday over the high-stakes amendment they placed on the ballot last week to swap property taxes for sales taxes.

The amendment is now going through the editing process in a cramped conference room in the second floor of a 1940s-era Tallahassee office building. The committee has postponed final wording of the measure until next week at a Thursday meeting. But so far, it has agreed to make these changes:

* use the wording of the draft written by Commissioner Patricia Levesque for most of the wording of the almost identical proposal by Commissioner and lead sponsor John McKay;

* the effective date for the cap on assessments on non-homestead property will be from 10 to 5 percent will be the 2009 tax year;

* limit the ability of school districts to levy taxes beginning in 2010-11 by reducing their potential miilage rate from 10 mills to 5 mills.

Haridopolos trades tricks with tax panel; Biz lobby wants revisions

Sen. Mike Haridopolos reversed the tables on the Taxation and Budget Reform Commission this week, sending them a letter strongly urging them to "give their specific recommendations on how we offset the revenue lost'' by their proposal to swap $9.6 billion in property taxes for a penny increase in the sales tax and other sales tax options.

The commission deftly avoided that task by leaving the job to the Legislature, thereby avoiding an election-year debate over whose ox will be the next to be gored.

Haridopolos, a non-voting member of the commission, calls their bluff and asks in his letter: How about putting into writing "your submission'' to "allow Florida voters to make an informed decision on the amendment."

Translation: He wants to help opponents mount the campaign. Haridopolos is convinced that if voters are honestly told that the only way to replace the lost property taxes on schools is to impose $3 to $5 billion in taxes on services, from the $24 billion pool of services that are now untaxed, they will be better served. "No bait and switch here,'' he told the Herald. "Tell voters it's a 2.7 or 2.8-cent sales tax increase...or $5 billion in services tax to get my school tax cut.'' Download 3.26.08 Ltr from Sen Haridopolis.pdf

Meanwhile, the business lobby is hoping the commission's Style and Drafting Committee makes some hefty word changes to the proposal when it meets today. Their goal is to provoke a two-thirds vote of the commission to get the new wording passed, and that in turn could open the door to amendments to it. They have abandoned hope of getting the measure repealed, several business lobbyists told the Herald, but they're now hoping to get it revised. Their pitch: phase out the repeal of the required local effort and phase-in the addition of the replacement money. Read more here.

Commission Chairman Allan Bense is no fan of commissioners changing their votes, though. ''I personally think all of us are morally bound to maintain the first vote we made -- to respect the sponsor of that vote,'' he told us. Commissioners had 45 days to study and review the proposal, he added: ``If a member had significant problems with it, I suspect we would have had it aired at the meeting.''

Some commissioners say they did know what they were talking about when they approved the plan, even though the economists gave them dueling opinions.

March 26, 2008

Crist to Realtors: Keep on keepin' on

Gov. Charlie Crist painted a bright picture of Florida's housing market Wednesday during a gathering of the Florida Association of Realtors at the Capitol.

He thanked the real estate agents for their influence in helping pass the property tax amendment that Florida voters approved on Jan. 29.

Besides property tax reductions allowed by the amendment, it also provides Florida homeowners with portability savings if they move into a pricier home. So far, 5,000 Broward County homeowners have applied for portability savings, and Crist said he's working to find out how many have applied statewide.

"It's all because of you," Crist said from the Capitol steps, adding that Florida needs Realtors now more than ever as the state's population has topped 19 million.

Conservative Colorado soccer Mom warns: Don't make our mistake

Kristie Hargrove calls herself a "typical soccer Mom," who is a "fiscally conservative Republican" that would have supported the Colorado tax cap passed in 1992 if she had been living there then. She and her family moved to Crested Butte in 1993 and by 2003, the state had gone drastically down hill.

"My daughter came home from school and said, I'm just freezing'' Hargrove recalled at a briefing in House Democratic Leader . The school board had decided that in order to save money, thermostats would be lowered significantly and students would just have to wear their jackers. Hargrove, a bookkeeper for her family building contracting company, demanded to see the books. "There was no money but we didn't know why."

After further investigation, she realized that the 10-year-old constitutional amendment, known as the Taxpayer's Bill of Rights known as TABOR which imposed strict limits on Colorado state and local spending meant that the legislature was forced to scale back dramatically school money. "I'm just your average citizen that goes and votes,'' she said. She thought that when she elected legislators, she could hold them accountable for decisions they made. But the TABOR proposal, written into the constitution, "has taken it out of their hands.''

"The sound bite is so easy: 'Just say no, it's your dough','' she said. "It's been devastating for us.'' To get out from under the cap, she said, local government "de-bruced" -- that's the jargon they use referring to the author of the TABOR idea, Bruce xxx. Local governments voted to exceed the caps, then raised fees and property taxes and created special taxing districts to pay for needs.

Overtime, the services that were traditionally paid by the state became the job of local governments and inequities prevail. Parents in wealthy school districts pay up to $900 in fees to have their kids play sports. Those luxuries are not as available in low income districts, she said.

Hargrove's visit to Tallahassee was paid for by the Center on Budget and Policy Priorities, a Washington-based think tank that advocates for low and moderate income familes. She will testify before the Taxation and Budget Reform Commission to urge them not to make the same mistake. "I can't understand why anybody would put that kind of fiscal constraint into the Constitution,'' she said.