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Michael Peltier: State tax battle pits consumers vs. property owners

By MICHAEL PELTIER (Contact)
8:36 p.m., Sunday, July 27, 2008

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TALLAHASSEE — The battle has begun as combatants try to win the hearts and minds of voters over whether to shift the burden of some school funding from property owners to consumers.

Last week, the Florida Association of Realtors picked up the gauntlet laid earlier this month by a coalition of business, education, and local government groups. The groups expect to spend more than a little for your vote.

The question is: Would voters accept a higher sales tax, possible budget cuts and other fees to free themselves from the portion of property taxes the state requires they pay for schools?

For most communities, the required school fees represent about 20 to 40 percent of their average property tax bill.

A proposal by the Taxation and Budget Reform Commission, which meets every couple decades to revamp Florida’s tax law, has proposed abolishing by 2010 that the portion of property taxes required under state law.

Instead, the proposal would raise sales tax by at least 1 cent but would require lawmakers to make up any difference so schools would not suffer.

They have only a few ways to do that: Reduce spending, raise fees, eliminate tax exemptions, or raise additional sales, corporate or real estate taxes.

Supporters led by the Realtors say measure would lessen the burden on Florida’s beleaguered property owners who have seen insurance and tax assessments rise as the state’s housing market, a long-time engine of growth, remains in the tank.

“Florida voters are united in their strong feeling that something must be done to cut property taxes in our state,” said FAR President Chuck Bonfiglio in a statement.

“Over the past six years, property taxes have more than doubled – add today’s higher fuel prices and food costs and it’s no wonder Florida families are struggling to make ends meet.”

Critics, a coalition of schools, business groups, homeowners and local governments, say the measure is simply another tax shift. Revenue lost by the property tax cut must be replaced somehow, most likely on the backs of businesses, first-time home buyers and second home owners who already face higher tax rates.

Last week a number of groups jumped into the battle including Florida TaxWatch, a Tallahassee-based fiscal watchdog, which said the proposal would “dwarf” any other tax increase in Florida history.

“Florida’s economy is facing one of its strongest challenges since the Great Depression,” the group wrote in a report last week. “Forcing the Legislature to make major unspecified changes to the state’s tax structure at this time and in this manner is a very dangerous proposition.”

The proposal would reduce statewide property tax collections by about $9 billion. A 1-cent sales tax increase now raises about $4 billion.

Lawmakers must determine how to make up the difference.

Behind the scenes, observers say the measure would force lawmakers to seriously consider eliminating tax exemptions and expanding the state sales tax to services, a huge untapped field ranging from hair care to financial advising and legal services.

Critics have said expanding the tax to services would disproportionately affect lower income residents, who pay a higher portion of their incomes when it comes to sales tax. Proponents say most low income folks don’t have weekly pedicures, newspaper subscriptions, financial advisers or personal attorneys.

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Contact Michael Peltier at mpeltier1234@comcast.net.

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Cutting taxes is not the way to solve our school problems. The article states, "the proposal would raise sales tax by at least 1 cent but would require lawmakers to make up any difference so schools would not suffer.

"They have only a few ways to do that: Reduce spending, raise fees, eliminate tax exemptions, or raise additional sales, corporate or real estate taxes."

The list doesn't include "cutting taxes." If politicians cut property taxes and raise sales taxes, they shift the burden from property owners [and businesses] to consumers. If we allow toll lanes to finance I-75 expansion, we users pay for the same thing twice. Not fair. Not just.

Legislators promised that the homestead exemption changes would not harm schools. Like lots of political promises, this one was totally phony. Teachers who are hanging on to their jobs are losing money. Custodians live with the sword hanging over their lives. Don't trust Tallahassee. Look what has happened!

Cutting taxes and costs has become a madness that has swept across our citizens like the crazy fear that swept us into war in Iraq. A world without homeowner property taxes is not Utopia! If we drop homeowner property taxes, it will create a great deal of agony and we will have to institute Florida State Income Tax.

Don't vote to cut education.

#1 Posted by dwyerj1 on July 27, 2008 at 10:51 p.m. (Suggest removal)

Voters facing higher gas and food bills may be receptive to a 25 percent cut in their property-tax bills.

"Florida citizens can't vote to cut their gas bills by 25 percent. They can't vote to cut their food bills or any other bills." Voters can vote to cut their property taxes by that much and I think they would welcome that opportunity.

As for finding the money to make up for the property tax loss for schools, lawmakers can look at the billions of dollars in sales-tax exemptions and exclusions to make up the shortfall.

There are plenty of "special interest tax breaks," such as the exemption for luxury skyboxes at sports events, that could be taxed.

Vote to cut Property Taxes!

#2 Posted by streetrodder on July 27, 2008 at 11:42 p.m. (Suggest removal)

Raising the sales tax means that less people will buy goods and services. We need more buyers, not less. A 6% sales tax is already too high. The sales tax used to be 4%. Meanwhile, millage rates have come down.

The biggest impact on taxes has come from the Save Our Homes Amendment. If neighbors shared the tax burden proportionate to the true values of their properties, then millage rates could be even lower while still adequately funding essential government services.

#3 Posted by POC on July 28, 2008 at 8:04 a.m. (Suggest removal)

want to save money on school taxes, start by enforcing immigration laws and see how many illegal aliens will be gone from the school rolls
hundreds of millions will be saved Mr Crist.
Lawmakes in florida had a chance to do something a few months ago but diez-Balart, House speaker Marco Rubio, David rivera shot down all bills submitted. Notice all of them are Cubans.

#4 Posted by grouper25 on July 28, 2008 at 8:19 a.m. (Suggest removal)

I am all for this change TOO!
Why should property owners carry the burden. If its a consumer tax then we all pay the school tax and that is fair! It might help the housing market too!
Yahhooooooo, Vote to cut property Taxes!

#5 Posted by Disney on July 28, 2008 at 8:21 a.m. (Suggest removal)

Disney,

Whether you pay the county or you pay a landlord who pays the county, everyone pays property taxes too. But, property taxes do not discourage consumers from buying goods and services from Floridians.

#6 Posted by POC on July 28, 2008 at 8:44 a.m. (Suggest removal)

GWB and others of his ilk rode this tax-cutting tsunami to popularity. Now we (at least some of us) see its horrible consequences.

Lots of our local folk are surfing the "illegal-alien" waves. Read about POSTVILLE, Iowa protest this weekend. Hatred and selfish jingoism is evil.

People should be kind and generous to each other. Pay your taxes. Give up the notion of deporting 20,000,000 Americans.

#7 Posted by dwyerj1 on July 28, 2008 at 10:03 a.m. (Suggest removal)

A 1-cent increase in the State sales tax wouldnt make a difference to the consumers...

Here's a sample of some other States....
Tennessee (9.4%), Louisiana (8.7%), Washington (8.5%), New York (8.25%), Arkansas (8.15%), Alabama (8.05%), Oklahoma (8.05%), and California (8.0%).

BTW....Florida has one of the lowest cigarette sales taxes at 0.339,where it has remained since 1990.
Florida’s tax is well below the national average of 99 cents, compare that to Connecticut at $2.00, Massachusetts tax, at $2.51 per pack, and NJ. at $2.75, maybe it's time to look at that.

If we had Higher Sales Taxes all consumers would share in the cost of education, including the Illegal Aliens..

#8 Posted by streetrodder on July 28, 2008 at 10:20 a.m. (Suggest removal)

While the world burns, just keep surfing the waves of tax-cut popularity? The $490 billion deficit this year is thrown on top of the National Debt pile, now $9.5 trillion deep. It grows daily by $1.7 billion. Who cares? We'll borrow from China and continue to give welfare to the have-mores.

Tax cuts are supported by John McCain and other old folks who will be dead by the time our children have to pay for their buffoonery.

I wonder how many corporations cheat on paying the government sales taxes due. Any sin-tax evasion in Naples? Cigarettes & alcohol purchased off the record, from off-shore (Bahamas?), from Native Americans?

It's past time to put away the cutting knife. When the tsunami hits, we'll all drown--even you penthouse people.

#9 Posted by dwyerj1 on July 28, 2008 at 11:25 a.m. (Suggest removal)

Pamela, if you'r talking about the estimated 20,000,000 Illegal Aliens, when did they become Americans??

#10 Posted by streetrodder on July 28, 2008 at 9:37 p.m. (Suggest removal)

Streetrodder: at birth.

Mexico, El Salvador, Guatemala, Yucatan, Belize, Nicaragua, Honduras, Costa Rica, and Panama _are_ countries of Central _America_. You think only citizens of the United States are Americans? What about all the countries of South America?

Americans all.

#11 Posted by dwyerj1 on July 30, 2008 at 9:29 p.m. (Suggest removal)

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