Sen. Mike Haridopolos opened his hearing this morning on the proposed tax swap as if he were Paul Harvey. "I'll be the first to admit, it sounded great," he said of the plan to replace most school property taxes for a 1 cent sales tax increase and other revenue sources.

"Now the rest of the story ..."

And so Haridopolos proceeded to trash the proposal, saying it would result in the largest tax increase in Florida history. (see the jump for the details) The Melbourne Republican has been battling the Taxation and Budget Reform Commission for answers about the plan. Getting nowhere, he decided to hold his own hearing.

He cast it as a chance to hear from regular folks, but the room was packed with lobbyists who, like Haridopolos, abhor the idea of a higher sales tax and a services tax. "We believe the people have been sold a bill of goods," said Barney Bishop, president of Associated Industries of Florida. Carol Dover, of the Florida Restaurant & Lodging Association, said it would be "devastating" to the tourism economy.

Here's how Haridopolos sees the plan:

The proposal would
cut $9-billion in school property taxes in 2010. The actual savings, however, would be $7.4-billion because people could write off less property taxes in federal returns. "That's the good part of the story," Haridopolos said.

But the Legislature
would have to come up with $11-billion in replacement revenue because of a
"hold harmless" formula to boost education spending. A penny sales tax
increase would generate about $4-billion, leaving a gaping hole.

Haridopolos says all the talk about repealing sales tax exemptions to
cover the rest is pure fiction, that popular targets like luxury
skyboxes, make up only $4.5-million. Million. Did he mention a gaping
hole?

The Melbourne Republican makes a strong argument, but leaves out out
the possibility the Legislature could increase the sales tax more than
a penny. And, in theory at least, sales taxes could be extended to
services, such as lawyers and accountants.

But seeing how that went down in flames in 1988, that's not going to happen. And there are growing signs that the tax swap proposal itself is faltering before the TBRC. It comes up for a final vote next week.