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An old tax idea for schools returns for a new look-see

Stick around long enough and old ideas become new again.

It doesn't mean they were bad ideas the first time around. Just not politically palatable.

John Legg, making his second run for the state House of Representatives, is talking about getting new money from old neighborhoods. Legg, in a recent interview with the Times, said there should be a way to get school construction dollars out of redeveloping neighborhoods, instead of relying extensively on impact fees from new housing starts.

Notice we said talking.

Legg wouldn't commit to the idea during the interview. (How can you support a tax if you're trying to attract the support of the no-new-tax wing of the Republican Party in a primary election?) He just conceded it's an idea worth exploring.

We're presuming the exploration ends Nov. 2.

This thing has been explored plenty. It's called a real estate transfer tax, or, in Florida, the documentary stamp tax. It's been around since 1931.

Florida levies the tax on deeds, stocks and bonds, notes and written obligations to pay money, mortgages, liens, and other evidences of indebtedness, according to the Florida Department of Revenue. The tax raised more than $292-million just in August, nearly two-thirds more than projected. The money helps to pay for land buying, affordable housing and other general revenue programs. Last year, housing starts and home refinances brought such a huge bump in income, the Legislature used some to finance Medicaid costs.

The current rate on deeds and real estate transfers is 70 cents per $100 of value. In other words, a $150,000 house would include a separate $1,050 in doc stamp taxes rolled into the closing costs.

The idea of tying a doc stamp tax to school construction has been around since the 1980s, after impact fees became the financing tool of choice to accommodate growth. Home builders like the notion because it removes the pass-through cost of impact fees from the price of their new houses. Realty firms oppose it. Taking a few thousand off the top will deflate real estate prices and commissions, they reason.

The doc stamp tax idea surfaced again last week when the Pasco School District invited its impact fee consultant to review data with community members including representatives of parent groups and the Council of Neighborhood Associations (CONA).

The focus was impact fees, but discussion drifted to the doc stamp tax because of district estimates that 40 percent of new students move into existing houses. It explains why new elementary schools are needed in Bayonet Point and Holiday even though the housing boom is centered in Trinity, Land O' Lakes and Wesley Chapel.

CONA sent a letter to the newspaper afterward opposing a real estate transfer tax. Current residents pay enough via sales tax and property taxes. Raise the impact fees, the group said.

The school district plans to ask the county commission to do just that. Expect the current rate of nearly $1,700 per single-family to increase significantly.

Rep. David Russell, R-Brooksville, whose district includes north central and northeast Pasco, predicts school concurrency will be a major issue next legislative session. The mechanics will be debated, but builders fear a moratorium more than they do impact fees, Russell said.

Which brings us back to the doc stamp tax where Russell's stand mirrors Legg's.

"I have mixed emotions," Russell said in an interview Thursday. "There's an affordable housing component here. At what point in time do we tax people out of home ownership."

"Is there disparity between buying a new home and buying a used home when you don't have to pay impact fees? Yea. Is it fair? That's a good question."

Russell incidentally just wrote a check for about $5,000 to cover impact fees for his newly constructed Hernando County house. Buyers in gated communities fork over impact fees even though the cost of their house also reflects a self-contained community responsible for its own roads.

Russell isn't optimistic the rules will change.

"As far as having to build a consensus at this point in time to create a new doc stamp, I'm certain it's something that will be considered. Again.

"Will it happen? That's difficult to say."

Translation: Don't hold your breath.

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