They voted: No Caps on Government Spending.

April 15, 2008

On April 14, 2008 the Florida Tax Commission voted against a proposal to establish caps on government spending, or impose a "super-majority" vote when levying new taxes.

The presence of angry home and business owners, worried about their soaring property taxes, failed to curb the resistance. Their insistence, during hours of discussion and testimonies, to rein in the free spending of counties and cities, or to require a majority of two thirds vote for tax raises, had no effect and the resolution will not make it into the next November ballot. Both propositions were defeated in the Tax and Budget Reform Commission by a 14-9 vote.

There is another citizen-led "cut-property-taxes-now", which is trying to put on the 2010 a constitutional amendment which would cap property taxes at 1,35% per year on any property's assessment. The Legislature is also considering placing a similar proposal on November 2008 ballot.

In a bit cryptic statement by Jim Scott, a former state Senate president and Broward County commissioner, the proposals that failed to rally enough support on the commission Monday were a "one-size-fits-all solution unworkable in South Florida". He added:

"To say this commission is going to determine what people spend ... they didn't give consideration to areas like Broward and Palm Beach counties, which have to deal with a large number of immigrants". Scott, is the vice chairman of the commission.

Another puzzling affirmation by former state Senator Les Miller from Tampa:

"No one here knows what is in this," former state Sen. Les Miller of Tampa said. "I was taught, when in doubt, vote no."

Opponents and supporters of the tax ceiling were allowed by the commission to testify Monday. Against the proposal were the AARP and the Florida School Boards Association. Supporters: the Florida Association of Realtors and Dory Kilburn, a resident of Crown Colony in Ocean Ridge, who represented the Boynton Intracoastal Group, a coalition of condos, home to many retirees.

Kilburn, a Canadian snowbird said: "You know how they say snowbirds are wealthy? Well, most of them live in small one-bedroom condos or mobile homes. They came to Florida decades ago, when it was affordable. Well, it's not affordable anymore."

Some of the opposing votes on the commission were based in the fact that the commission has already agreed to put a proposal on November's ballot. If approved, it would eliminate the property tax that now funds public schools and mandate the Legislature to come up with replacement funds while capping increases in the assessment of all non-homesteaded properties at 5 percent a year.

That proposal, which must be approved by 60 percent of Floridians voting to become law, calls for the Legislature to adopt up to 1% increase in the state sales tax along as well as other measures, such as spending cutbacks and the elimination of some service sales tax exemptions. Some commissioners considered that the revenue-cap measure debated Monday would require the Legislature to meet the two-thirds vote threshold to offset the loss of school property taxes, and that could be a difficult task which could jeopardize schools budgets.

If the school property tax is eliminated, the state will lose more than $9 billion in public school funds. The 1% increase in the sales tax will raise about $3.9 billion, and the Legislature would be challenged to find a way to raise the $5.1 billion balance.

Legislators asked the commission to suggest them how to get these $5.1 billion, and the Senate Finance and Tax Committee has scheduled a public hearing on the issue Friday.

With all due respect: as we suspected they would, the powerful tax commission has addressed the problem by trying to swap property taxes with sales taxes. But the real subject which is: "why should local governments be allowed to adjust taxes to their fit their budget?", instead of adjusting their budgets to fit reasonable taxes" has once again been ignored.

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
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