Every serious examination of Florida's tax system over the past two decades has found it to be antiquated, unfair and inadequate. But no one will fix it. The latest failure — from a constitutionally created commission established for precisely this type of tax reform — turns the spotlight back where it belongs. The state doesn't necessarily need a constitutional amendment to tackle tax reform. It only needs a governor and state legislators with a shared vision and strong spines.
The tortured language that led the Florida Supreme Court to remove Amendment 5 from the November ballot is a window into the crass politics that shaped the Florida Taxation and Budget Reform Commission. The appointed commission is supposed to be an alternative to the elected Legislature, where tax issues often are held captive by special business interests who tell lawmakers how and whether to vote — or face the consequences in the next election. This time, the commissioners behaved all too much like legislators.
Amendment 5 was originally motivated, at least, by a good-faith effort to apply the state sales tax to a myriad of goods and services that are unfairly exempted. After all, the state has no income tax, and the sales tax has been so carved up by special interest exemptions that the state collects less money per year than it exempts. Unfortunately, commissioner John McKay, a former Senate president, soon found his colleagues were more interested in pandering on property taxes and making deals.
The result was a tax swap that put public schools at considerable risk. It called for the elimination of required school property taxes to be replaced by an extra penny of sales tax and vague assurances to remove sales tax exemptions.
The next tax reform commission won't be appointed for another two decades, and two recent citizen initiatives failed to pass legal hurdles. So the question now is whether Gov. Charlie Crist and the risk-averse leaders of the House and Senate are willing to take the lead themselves.
The state has endured enormous shifts in revenue in recent decades, having grown as much as 27 percent in one year and now on a path for three consecutive years of losses. Its public schools, universities, hospitals, roads, social and child-welfare agencies are being pushed to the point where the losses threaten the quality of life for generations to come.
Still, Crist and legislative leaders act as though tax cuts should be the only priority in a state whose taxes rank 47th lowest in the nation. The only "tax reform" in the past decade has been the piecemeal creation of more tax breaks, the reduction of business taxes and the elimination of taxes on wealthy stockholders. Instead of achieving fairness, lawmakers have only made a bad tax system worse.
After each failed attempt to change taxes in recent years, opponents generally have offered an obligatory commitment to find a better way. Last week, Florida TaxWatch president Dominic Calabro offered his own.
"Although we feel that removing Amendment 5 from the ballot is the appropriate outcome in this case," Calabro wrote, "Florida TaxWatch will work with Gov. Crist, legislative leaders, and key groups across the state to put together meaningful tax and spending reforms."
That is encouraging. But Florida's tax history is littered with empty promises and frightened politicians. Who among the elected politicians in the state capital will rise to the challenge?