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Panel to discuss property tax reform today

TALLAHASSEE — For months, they have been cast as the wise elders who will sort out Florida's property tax problems and place a thoughtfully crafted proposal on the November ballot.

Today, the mythology surrounding the Taxation and Budget Reform Commission gets a reality check.

During an all-day meeting in Tallahassee, the commission will consider several plans to lower property tax bills.

But the bar is high for passing a significant overhaul. And with the Legislature hopelessly fractured on reforming the system, the commission may be the state's last shot at dramatic changes for years.

"Is there pressure on the TBRC? Absolutely," said state Rep. Frank Attkisson, R-Kissimmee, one of many lawmakers who felt the Amendment 1 plan voters approved in January fell short of what is needed.

The commission is made up of 25 business leaders and former politicians appointed by the governor and the Republican leaders of the House and Senate.

The most talked-about proposal also has the longest odds of passing.

Former Senate President John McKay, a Bradenton real estate broker, wants to replace the roughly $8-billion in annual school property taxes with sales taxes levied on goods and services now excluded, such as dry cleaning or charter fishing. His proposal would also increase the statewide sales tax, now 6 cents, by 1 cent.

McKay estimates his plan would cut property taxes by 25 percent. But the idea has drawn sharp resistance from fellow commission members with ties to business who say it will cost thousands of jobs.

With 17 votes needed to pass, McKay's plan will likely fail.

But there is another proposal with a similar aim. Patricia Levesque, a former deputy chief of staff to Gov. Jeb Bush, also wants to swap the tax for schools, called the Required Local Effort, with other revenue sources.

The difference is Levesque leaves it up to the Legislature to make up the difference. Options include a 1 cent sales tax, which would raise $4-billion annually, repealing some sales tax exemptions and cutting state spending.

On her side is House Speaker Marco Rubio, who attempted a similar plan in the Legislature last year only to face opposition from the Senate. Rubio has been lobbying members to pass the proposal and said he thinks 17 votes are attainable.

"We are literally a vote away from putting the most meaningful property tax reform in the history of our state on the ballot," he said. "And I hope we don't let that opportunity pass us by."

Business interests on the commission still oppose the proposal because of the sales tax increase. "It's not a good trade," said commissioner Randy Miller, vice president of the Florida Retail Federation.

As a carrot to commercial and investment property owners, both the McKay and Levesque plan would further shield nonhomesteaded property owners from annual increases in property taxes. Their plans would lower to 5 percent the 10 percent assessment cap approved under Amendment 1 for nonhomestead property. The 10 percent cap is seen as mostly ineffectual because assessments do not generally surpass double digits in a given year.

Former state Rep. Carlos Lacasa has the third major proposal before the commission: a new homestead exemption worth up to 25 percent of the just value of a home. It would also limit annual assessment increases for nonhomestead property at 5 percent.

Lacasa, a Miami Republican, said he will withdraw the proposal if either Levesque or Mc­Kay's plan passes. He argues a new homestead exemption would not be necessary if everyone gets a 25 percent tax break.

"We're all trying to get to the same point of bringing tax relief, but you can't have both," Lacasa said.

However, some TBRC members see his plan as more viable.

Greg Turbeville, a lobbyist and former Jeb Bush policy director, said Lacasa's plan mitigates legal issues with Save Our Homes, the existing 3 percent annual assessment cap that favors longer-term homeowners over new ones. A lawsuit has been filed in a circuit court in Tallahassee challenging Save Our Homes.

Tuberville also feels an elimination of school property taxes would not provide as much benefit because property owners could pay more in sales tax. "With Florida's economy needing a boost, I hope we'll focus on a clear tax cut rather than a swap," he said.

One other dramatic option on property remains in play: A cap on all state and local government revenue and spending. But that won't be discussed until later this month.

Whatever happens, the tax commission is feeling the pressure to do something.

"The No. 1 concern expressed by citizens by far is property tax relief," McKay said. "It's imperative that we address that. If we don't, you can conclude that this effort has been a failure."

Tallahassee Bureau Chief Steve Bousquet contributed to this report.

. fast facts

What's the plan?

The Taxation and Budget Reform Commission is considering several property tax proposals today. They include:

• A plan to swap $8-billion in annual school property taxes with sales taxes levied on goods and services now excluded, such as dry cleaning. The proposal would also increase the statewide sales tax, now 6 cents, by 1 cent.

• A similar idea to replace school property taxes that would leave it up to the Legislature to decide how to make up the difference.

• A plan to create a new homestead exemption worth 25 percent of a home's just value and to cap nonhomestead assessment increases at 5 percent.

• A new assessment designation for waterfront property that is used for certain commercial use, such as a marina or small beach hotel.

On the Web

For more information on the committee, visit

Panel to discuss property tax reform today 03/16/08 [Last modified: Monday, March 17, 2008 8:52pm]
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