East Coast - Saturday, July 19, 2008 13:53 - 0 Comments

EDITORIAL: Time to talk taxes

State Sen. Mike Haridopolos announced plans Tuesday to step up his opposition to November’s Amendment 5 with 10 public forums to debate the proposed property tax changes. He has challenged former Senate President John McKay to a debate, and though McKay has yet to accept, Haridopolos should have a crowd because citizens all across the state have been clamoring for tax reform.

McKay sponsored the controversial amendment as a member of the Taxation and Budget Reform Committee (TBRC) that closed up shop in April after months of addressing not just taxation, but also government spending. The amendment would eliminate the Legislature-mandated portion of local property taxes that fund public education. This so-called required local effort amounts to 25 percent to 35 percent of a typical tax bill and according to Florida TaxWatch, the RLE has doubled since 2000, making it a major factor in overall property tax increases.

To replace the lost revenue, the Legislature could cut other spending or impose a 1 ‑percentage point increase in the state sales tax. The Legislature would also have the option to repeal exemptions in the sales tax. And that’s the possibility that has many detractors lining up to weigh in on the debate leading up to the Nov. 4 vote.

Haridopolos believes the amendment is a “bait and switch” that would substitute higher consumption-based taxes and for lower property taxes. Opponents also point to further cuts in public funding as the state is forced to look elsewhere to close the estimated $9.5-$11 million shortfall in revenue from the amendment. Earlier this month, a coalition of business, education and agriculture organizations filed suit to have the amendment removed from the ballot on the grounds that the amendment is misleading.

Proponents, such as the Florida Association of Realtors, believe the amendment has the ability to help the state’s real estate industry by encouraging more home sales and that it goes further than January’s Amendment 1 by providing relief to non-homestead property owners.

There is an element of uncertainty in relying more on sales taxes because revenues from consumption-based taxes are particularly vulnerable during times of sluggish economic growth and state economists are projecting Florida’s economic slump to last through the end of 2009.

But Amendment 5 represents real reform in that it reduces the amount of control government has over private property.

Though the TBRC was unable to change how property is assessed from highest and best use to fair market value or place the burden of proof on appraisers in disputes with owners over valuations, the amendment does diminish the state’s ability to influence private property. And the power to tax is the power to destroy because a property owner who cannot pay his taxes is forced to sell the property or have it seized by the government - even if there is no mortgage or lien against the property.

The ideal situation would have been for Amendment 5 to be offered along with the proposed Taxpayer Bill of Rights (TABOR). The measure would have limited the increase in state revenue to a formula based on population growth plus the rate of inflation and required voter approvals for increases in taxes or state debt. Together both would have addressed taxation and government spending controls. But the TBRC and the Legislature were unable to pass the measure.

Bay Countians won’t have their property-tax notices in hand for the local debate scheduled for Aug. 13 at Gulf Coast Community College, but the event still will present an opportunity for citizens on either side to discuss the issues before casting their vote in the fall.