PROPERTY TAXES

Amendment 5 opponents begin campaign

June 24, 2008
Author: Tampa Tribune, Fla., Catherine Dolinski

TALLAHASSEE, Fla. – June 24, 2008 – An aspiring state Senate president began his campaign on Monday to defeat a ballot proposal that would slash property taxes by raising the state sales tax and possibly carving into the state budget.

The political battle pits Mike Haridopolos, in line for the Senate presidency in 2010, against former Senate President John McKay. McKay, a Bradenton real estate developer, proposed the tax swap as a member of the state Taxation and Budget Reform Commission, which voted this spring to place the question before voters in November.

The tax-swap fight transgresses usual political boundaries. Both Haridopolos and McKay are Republicans. Backing Haridopolos are school boards and the state teachers union, farmers, hospitals, AARP and the fiscally conservative National Federation of Independent Business. It’s an unlikely coalition of groups that often lobby on opposing sides, but whose overlapping interests in state funding and tax exemptions – as well as possibly currying favor with an incoming Senate president – have united them against Amendment 5.

On McKay’s side: the powerful Florida Association of Realtors (FAR), which invested $1 million in the campaign to pass the Amendment 1 tax cut in January and says it intends to spend at least as much on Amendment 5 this fall.

“Some of the groups that stood against this today, I haven’t seen any comprehensive property tax relief coming from them,” said John Sebree, FAR vice president of public policy. “Is any property tax relief good to them?”

Amendment 5 would eliminate the portion of property taxes that pay for public schools, in exchange for increasing the sales tax by a penny, repealing some sales taxes exemptions and exclusions, cutting the budget, revenue growth attributable to Amendment 5 or some combination of those.

The state-mandated schools portion of property taxes is worth $8.9 billion, about 25 percent of total property tax collections. Amendment 5 would require lawmakers to pay back the entire amount to schools.

Wayne Blanton, director of the state School Boards Association, said Monday that he does not trust lawmakers to do it. “They’re more prone to come in and cut services than they are to do the right thing.”

McKay said that’s a sad commentary, “but in the event that the Legislature does not uphold its constitutional duty, as outlined in the amendment, we’ll be in court very quickly.”

Haridopolos has argued that growth in school funding will boost the true cost of the plan from $8.9 billion to $11 billion.

Raising the sales tax by one penny, he said, will generate about $3.5 billion, leaving lawmakers without sufficient means to fill the gap unless they pass “the biggest tax hike in Florida history,” carve deeply into the state’s shrunken budget, or both.

Haridopolos and McKay disagree on the potential for filling in the gap. On Monday, Haridopolos challenged McKay to debates across the state on Amendment 5.

McKay said he would be happy to debate Haridopolos, a responsibility he would share, he said, with other commission members.

McKay criticized some of his opponents for “playing loose” with the numbers.

“Some folks are quoting future projects for the schools portion of property taxes, but then quoting only what a penny in sales tax would raise today,” he said.

Sebree said the relief from Amendment 5 would reach much further than the effects of Amendment 1, which primarily targeted homesteaders.

“This amendment would affect every property owner in Florida,” he said.