TaxWatch says swap will increase taxes

Thursday, July 24, 2008

By Bill Cotterell
FLORIDA CAPITAL BUREAU POLITICAL EDITOR

A proposal to swap school taxes for a wide range of consumption levies and budget cuts is a tempting “fiscal Trojan horse,” a government policy-study group said Wednesday.

Florida TaxWatch issued an analysis of Amendment 5, which would repeal the “required local effort” of county property taxes for education. It would make the Legislature come up with replacement revenues through some combination of a sales tax increase up to 1 percent, repeal of exemptions, levies on new goods or services, and cuts in state spending.

“This is a fiscal Trojan horse and not good for Florida taxpayers,” said Florida TaxWatch President Dominic Calabro. “It’s not a tax cut, it’s a tax swap. While you reduce one set of taxes—particularly taxes on very wealthy landowners—it will fall on working families, small businesses and senior citizens.”

Calabro and Kurt Wenner, director of tax research for the non-partisan group, discussed their study just a day after the Florida Realtors Association announced it was putting up $1 million to start a “Give Me 5 for Florida’s Future” campaign. The amendment must get 60 percent approval to pass in the November election.

FAR vice president John Sebree responded that the TaxWatch study, while warning of massive budget cuts and uncertainty about what might be taxed to replace lost property taxes for schools, did not contemplate options like applying the sales tax to Internet sales. He also cited legislative turkeys—pet projects for powerful members—that TaxWatch annually spotlights in the budget.

“TaxWatch would better fulfill their mission to leave the politics out of this and offer a list of options for increased revenues and budget cuts,” said Sebree.

Wenner said the state would have to come up with a combination of $11 billion in new taxes and budget cuts if the pending amendment passes.

“These new taxes required by Amendment 5 will be several times bigger than anything the state has enacted before,” he said. “But these new state revenues will not significantly enhance education, build more roads, provide better public safety or insure more children.”