Options shrink for property tax reform in Florida

By Alex Leary, Times Staff Writer
In print: Tuesday, April 15, 2008

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TALLAHASSEE — Just last month it looked as if Florida voters could have two choices for reforming the property tax system in November. Now, it's possible they could have none.

A powerful tax commission on Monday killed a controversial ballot question that would cap revenue collections for state and local governments, denying voters a chance to consider the idea in November.

The meeting also revealed fissures in support for the only other sweeping property tax measure the commission has considered and tentatively approved for the ballot: a plan to eliminate school property taxes and replace them with an increased sales tax and other revenue.

Several members of the Taxation and Budget Reform Commission expressed concern with the so-called tax swap as the citizen panel met in Tallahassee. One commission member declared he would change his vote when the plan comes up for a final vote next week, and others hinted they were leaning that way.

Commission members Richard Corcoran and Patricia Levesque said they have always viewed the cap and the swap as working in unison, not on their own, a position shared by House Speaker Marco Rubio, who appointed seven of the 25 members.

The discord came as the tax panel made a surprising move that could result in consumers paying sales tax on items bought over the Internet and by mail. The ballot question would require the Legislature to pass a law in which Florida would join 22 other states that have an agreement with more than 1,000 companies to voluntarily collect the tax and that are pushing for a federal law to enforce sales tax collection across state lines.

While not on the agenda, the tax swap provided the most intriguing element to Monday's meeting, one of the last before the citizen commission disbands May 2.

"There's certain language in (the tax swap) that has been made brightly clear to us now that was not debated that way," Mike Hogan, the Duval County tax collector who sponsored the revenue cap, told reporters during a break.

Hogan said it's clear now that there's not enough alternative revenues to make up the $9.5-billion in school property taxes as required by the tax swap plan. While the Legislature could raise about $4-billion by increasing the sales tax 1 percent, critics say there are not enough sales tax exemptions to make up for the rest of the lost property taxes. Hogan and others fear that will lead to a tax on services, such as lawyers and accountants.

As a result, Hogan said he will change his vote on the swap. Others are considering the same when the plan comes up for a final vote on April 24 or 25.

"If the facts are borne out that my initial vote was wrong then I have no problem changing it," said commissioner Bruce Kyle, a former state representative from Fort Myers.

It takes 17 votes to place a measure on the ballot. The initial vote on the tax swap was 21-4, meaning four other commissioners would have to join Hogan to strip it from the ballot.

Former House Speaker Allan Bense, who chairs the tax commission and voted for the tax swap, had previously said he expects the same outcome. On Monday, however, Bense said the sales tax issue is "substantive." He would not say whether he is reconsidering.

Commissioner John McKay, who first proposed the swap, called Hogan's argument a "red herring" being advanced by special interests trying to kill the idea in fear they could lose tax exemptions.

"The Legislature has a litany of alternatives available to it, including a second penny," McKay said.

There may be more political subtleties at work, too. McKay did not support two measures before the commission that could revive the state's private school vouchers. That angered supporters, given that one voucher program for disabled children is named for McKay.

"Tax relief should not be hijacked by ideology," McKay said.

Voucher supporters may get another shot at a proposal that was previously defeated; it comes back up for reconsideration next week.

McKay, a former state Senate president, was also one of the votes Monday against the revenue cap, which has been one of the most hotly debated issues before the tax committee. The original proposal would have capped local and state revenue collection by population and inflation plus 1 percent.

But the plan has been greatly watered down. Its final form simply said local or state elected officials would need a super­majority vote before creating or increasing taxes and fees.