The Florida Supreme Court's decision to block an ill-conceived, simplistic property tax cut from the ballot is good news for Florida and an unexpected gift for state lawmakers. Last month's ruling is the second in recent months where the court has disqualified a proposed amendment due to misleading language. The result is an unexpected window for the Legislature to embrace real tax revenue reform. Senate President Jeff Atwater and incoming House Speaker Larry Cretul should take advantage of this opening and get it right.
The citizens' initiative cast aside by the court would have capped property taxes at 1.35 percent of taxable property value, roughly 17 percent below the current statewide average. But the justices ruled 5-2 that the ballot summary was misleading because it failed to include information that it would only be in effect for two years before it would have to be reauthorized. Misleading language is the same complaint the court had about another property tax cut plan put forth last year by the Florida Taxation and Budget Reform Commission. That measure would have slashed property taxes and replaced them with a higher sales tax.
Florida's most recent attempt at property tax reform, last year's Amendment 1, only made the state's primary method for funding schools and local government more unfair. Amendment 1 further enhanced the already considerable benefits under Save Our Homes by allowing longtime homesteaded homeowners to take their Save Our Homes tax benefits with them when they move to a new home. The status quo enables longtime homeowners to pay relatively little in property taxes while newer neighbors are required to pay thousands more. And nonhomesteaded properties — from businesses to second homes owned by snowbirds — have shouldered a bigger and bigger share of the tax burden.
In theory only, the 1.35 percent cap would have been an improvement because it would have treated all properties equally unless a homeowner's Save Our Homes benefit was larger. But in practice, the plan would have had a draconian impact on local governments and schools. The plan would have cut an estimated $6-billion more from public schools, local governments and special taxing districts that are already paring budgets to cope with declining property values and existing revenue caps. The plan offered no solution for when such cuts force the closure of schools and county health clinics, furlough police officers or stall road repair.
Now the Supreme Court's decision has given lawmakers a new chance to get it right during the regular session that begins March 3. Only by embracing new sources of revenue can the Legislature afford to offer meaningful and fair property tax reform. Among the options: Repeal sales tax exemptions, increase cigarette taxes, and make it easier to collect sales tax on Internet sales. There is also an opportunity to raise gasoline taxes or automobile tag fees, which haven't increased in more than a decade.
Only with new sources of revenue can lawmakers consider truly fair reform to the state's property tax system. It won't be easy, but Florida's future depends on it. Should lawmakers fail, there are more citizens' petitions waiting in the queue.