Miami Herald: Powerful senator condemns tax swap

Saturday, April 19, 2008

BY MARY ELLEN KLAS

TALLAHASSEE—A powerful state senator held a one-man tribunal Friday to point out the pitfalls of a proposed constitutional amendment to swap some school-district property taxes for higher sales taxes.
Sen. Mike Haridopolos, a Melbourne Republican who chairs the Senate Finance and Tax Committee, had tried earlier to persuade the state Taxation and Budget Reform Commission to explain what they meant when they required legislators to find the money to replace the $9 billion for schools if voters approve the amendment in November.

The panel has proposed a constitutional amendment that would replace a portion of property taxes that pay for schools with a one-cent increase in the sales tax, additional sales tax expansions and other revenues. The amendment would require legislators to decide where to get the $9 billion lost in money for schools, but doesn’t tell them how to do it.

‘’Show us the money,’’ said Haridopolos, who hopes to be Senate president in 2010 when the amendment would take effect.

NET INCREASE

He said his analysis shows the measure would result in a $3.6 billion net tax increase, because property owners would lose $1.6 billion in federal deductions for local taxes, and lawmakers would have to raise another $2 billion to protect schools from additional budget cuts once the amendment takes effect.

‘’The numbers are real clear—it’s a $3.6 billion tax increase,’’ Haridopolos said. ``It’s going to come as a shock for a lot of Floridians.’’

No one challenged his assumptions, but Sen. Ronda Storms, a Brandon Republican, said she believes many people will vote for the amendment because they believe they can control what they spend on taxable goods, but they can’t control their property tax bill.

The average homeowner in Florida would save around 25 percent on their property tax bill if the measure is approved, though some could see higher savings.

Two speakers at the hearing originally supported the tax swap and now oppose it. Wayne Blanton, head of the Florida School Boards Association, said he no longer supports the idea because his organization believes the property tax system has been a stable and reliable source of money for education and doesn’t want it changed.

Ken Plante, a veteran lobbyist and former Senate leader, had coached members of the tax commission on how to shape the plan, but now represents community colleges and car dealers who want to kill it.

The lineup of opponents also included people who fear the measure will inevitably lead to sales taxation of some services: business owners, business lobbyists and Winston Gardner, the president of TLC Engineering for Architecture in Merritt Island.

Gardner was one of the Legislature’s tax chairmen during the services-tax debacle in 1987 and 1988. His warning: Think of the politics.

RISKY POLITICS

‘’To cut property taxes 30 percent is pretty doggone popular, but [voters] are going to lose sight of that when they have to vote on the people who voted on the replacement revenue,’’ he said.

He ticked off a list of legislative leaders who were not reelected after the 1987-88 services tax was enacted and repealed: former Gov. Bob Martinez, former state Rep. Sam Bell, former Senate President John Vogt and former Senate Rules Chairman Dempsey Barron.

‘’Should this pass, it’ll be the largest tax increase in the history of the state at a time we cannot afford it,’’ Haridopolos said. ``It’s unstable.’’

He said he hoped the hearing would persuade members of the 25-member tax commission to reconsider their vote when they meet again on Thursday to determine the final wording of the proposal on the ballot.

‘’We can do better,’’ he said.