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Senate says no to tax swap, offers revised plan
 

TALLAHASSEE, Fla.  – April 25, 2007 – Senate negotiators said Tuesday they don’t even want to talk about a Republican-sponsored House proposal to trade homeowner property tax relief for higher sales taxes because they believe it has no chance of passing should it get on the ballot.

Instead, they offered a revised plan to roll back and cap property taxes, which could take effect without going on the ballot.

It would save taxpayers an estimated $15.3 billion over five years. That’s about $3 billion more than the Senate previously had proposed but less than half of what the House wants.

“We want to focus on the possible,” said Sen. Mike Haridopolos, R-Indialantic, who is leading the Senate delegation on a joint conference committee.

His House counterpart, though, said the tax swap, which would require a state constitutional amendment (HJR 7089), is the only viable proposal yet offered to reduce inequities among taxpayers while also deeply cutting their tax bills.

“If they are not willing to look at that, I would consider that something they ought to rethink,” said Rep. Dean Cannon, R-Winter Park.

While most House Democrats also oppose the tax swap, senators of both parties have been united.

The latest Senate offer would roll back taxes one year, as previously proposed, and then add a 5 percent cut on top of that. The Senate would also apply the rollback to all special taxing districts instead of exempting independent districts as previously proposed. As in the prior plan, taxes would then be capped with allowances for growth and inflation.

In arguing against the tax swap, Senate Majority Leader Dan Webster, R-Winter Garden, pointed out the Florida Constitution requires voters to approve amendments that would increase taxes by a two-thirds margin.

“I am 100 percent sure it would be very difficult to pass — impossible to pass,”' Webster said at the first of two conference committee meetings Tuesday.

Cannon later said that should not stop lawmakers from putting it before voters.

“If they don’t choose it, then they’ve made that choice, not us,” Cannon said.

While lawmakers debated, another tax relief rally — the second in as many weeks — took place outside the Capitol. Several hundred homebuilders wearing blue and orange hard hats gathered to urge that lawmakers cap impact fees as well as taxes. Local governments put impact fees on new homes to help pay for roads, utilities, schools and other growth-related costs.

Gov. Charlie Crist and several legislators spoke at the rally. Crist later said it was too early to tell whether the tax swap was dead, even though less than two weeks remain in the regular legislative session.

“It’s intriguing,” Crist said of the House plan. “We have to do the doable, though.”

If the conference committee declares an impasse on the issue, the tax swap would be bumped up to House Speaker Marco Rubio, R-West Miami, and Senate President Ken Pruitt, R-Port St. Lucie, to see if they can come to an agreement.

Those discussions would include a competing Senate amendment (SJR 3034) that has no sales tax increase. Instead, it would let owners of primary homes, known as homesteads, take a part of their Save Our Homes Amendment benefits with them when they move, known as “portability.”

The Save Our Homes Amendment, which voters approved in 1992, limits homestead tax increases to no more than 3 percent annually. Many homeowners, though, say they feel trapped in their existing homes because they would lose their tax advantage if they move.

Save Our Homes also has meant higher taxes for new homeowners and owners of non-homestead property including second homes, rentals and businesses.

Cannon said the tax swap would address those inequities by reducing or eliminating property tax on homesteads.

The amendment would automatically lift the state-required property tax for schools from homesteads in exchange for raising the statewide sales tax from 6 percent to 7 percent.

Remaining homestead property taxes for cities, counties and school districts then could be traded for additional sales taxes of up to 1.5 percent through countywide referendums.

Such drastic cuts or elimination of homestead taxes would make portability unnecessary, Cannon said. The swap also would reduce or eliminate inequities between new and longtime homeowners. Another advantage is tourists pay a big part of the sales tax, Cannon said.

Cannon’s defense of the swap came only a day after he said the House wasn’t wedded to the concept if another way could be found to make substantial property tax cuts. He said Tuesday, though, the House also wants to fix the inequities and the Senate plan doesn’t do that. He said the Senate portability amendment is just too complex.

Webster later said raising that sales tax would be even more inequitable by shifting tax burden from some of Florida’s wealthiest citizens to everyone else, adding hundreds of dollars to the cost of cars and other major purchases by Floridians struggling to make ends meet.

“That is far more regressive than anything else that could happen to them,” Webster said. “We don’t want to empty a room of unhappy people and fill it with another group of people who are also unhappy.”

© Copyright 2007 The Associated Press, By Bill Kaczor, Associated Press Writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.