News Press Editorial: Vote down shell game amendment

Monday, June 30, 2008

An impressive alliance has formed to oppose a tax-cutting amendment on the November ballot. We wish them well.

The Protect Florida’s Future coalition was announced this week by Sen. Mike Haridopolos, R-Indialantic, chair of the Senate Finance and Tax Committee and Senate president-designate in 2010. It has representatives of small business, education, health care, farm interests and others.

Why are so many people so alarmed by Amendment 5 in a year when a tax-cut amendment won overwhelming voter approval in January?

The answer is that Amendment 5 is a shell game that takes a reckless gamble with the future of education funding in Florida.

The amendment, if approved by 60 percent of voters, would eliminate that portion of your property tax that pays for operation of the local school system, typically about 25 percent of the tax bill and adding up to about $9.5 billion annually statewide.

Lovely tax cut, but what about the lost school funding? The amendment naively leaves it up to future legislatures to make up the difference, plus raise an additional $2 billion for education.

About $4 billion would supposedly be raised through a 1-cent increase in the state sales tax. The remaining $7 billion would hopefully come from a dubious mix: closing sales tax exemptions, economic growth and “other revenues” to be discovered somehow by lawmakers. The amendment says the schools are to be compensated for the tax loss, but there is no guarantee.

All sorts of businesses are worried about how raising the sales tax might hurt the state economy and about losing their sales tax exemptions.

This is not a tax cut measure; it is a tax swap. It will lead to new taxes, possibly a net tax increase- a serious setback for a state in recession.

But the most widespread fear is that an education system already one of the worst-funded in America will have a huge hole punched in its hull and left to beg and fight for enough money to plug it.

This dangerous measure was put on the ballot by the Taxation and Budget Reform Commission, and is the special enthusiasm of commission member John McKay, a former Senate president. McKay and Lee County Property Appraiser Ken Wilkinson tried unsuccessfully last week to convince The News-Press Editorial Board of the wisdom of this measure.

We respect McKay’s desire to reform our screwy, exemption-riddled sales tax system, as we respect Wilkinson’s passion for genuine tax reform and spending controls.

But this is the wrong way. We urge people to oppose and vote against Amendment 5.