Florida Today: Our view: Trash the swap

Monday, July 14, 2008

Voters should turn down risky tax proposal that destabilizes school funding

Floridians voted in 2002 to amend the state Constitution to protect pregnant pigs.

Will they vote in November to throw stable funding for public education into a black hole?

They just might, because Amendment 5—the black hole proposition put on the ballot by the Florida Taxation and Budget Reform Commission—promises to dramatically shrink their property taxes.

The proposal would scrap the “required local effort” property tax for schools at the county level, saving Brevard homeowners an average 30 percent on tax bills, or about $1,200 on a home with a taxable value of $250,000.

That bacon smells mighty tempting.

But voters shouldn’t bite.

Here’s why:

The plan, which would take effect in 2011, eliminates $9.5 billion in school property taxes and charges lawmakers to replace it with $11 billion from new revenue options, such as a 1-cent sales tax increase.

That’s shifting from a stable funding source for schools to a highly unpredictable one—as shown by the past six consecutive months of sales tax revenue drops statewide.

The extra penny tax would raise only an estimated $3.5 billion in today’s stalled economy.

So, where to recoup the rest of the lost funding?

The amendment’s wording suggests repealing some of Florida’s sales-tax exemptions.

There’s no doubt some of those are just gifts to special interest that should be shuttered, but lawmakers lack the political will to do so.

A third option would be to cut spending elsewhere.

Read that as code for more budget slashing at state agencies, reductions that filter down to the local level as stalled transportation projects, fewer public safety officers on the streets and other critical service cuts.

That’s what happened in Tallahassee this year, when the GOP-dominated Legislature bent over backwards to avoid reasonable tax reforms to prevent deep cuts to education and programs for the sick, elderly, poor and disabled—such as raising the cigarette tax or joining a nationwide compact to tax Internet transactions.

Lastly, the amendment says the state could plug the tax-swap hole with undefined “other revenue options created by the Legislature.”

Pardon?

That’s like being asked to sign on the dotted line without reading the fine print.

The proposed amendment’s lack of clarity is why opponents, including business, public safety, education and agricultural groups and Florida AARP, are rightly lining up to fight its passage.

“This amendment is misleading and will be devastating to schools throughout Florida,” says Wayne Blanton, executive director of the Florida School Boards Association, which backs a lawsuit filed June 3 to have the measure taken off ballots.

The court should toss Amendment 5 because it’s a confusing bait and switch.

But if not, voters should turn it down because of the strong probability lawmakers won’t obey the mandate to hold education harmless if Amendment 5 passes.

That’s what happened with Amendment 1 tax reforms, passed by voters in January, and history has an ugly way of repeating itself in Tallahassee.