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Tax / Budget Reform
Tax Examiners
The Tax and Budget Reform Commission has 16 months to come up with a better way of doing things.
More recently, "tax reform" has meant "tax repeal." Bush and many Republican lawmakers built their political careers on the idea of lower taxes. There has been little structural change, though, other than repeal of the intangibles tax and the communications-equipment tax -- mostly tax holidays and new exemptions.
Today, "tax reform" means one more thing: Restraining local property taxes, especially on homeowners. As a gubernatorial candidate, Charlie Crist promoted a doubling of the homestead exemption -- a break for homeowners but a tax shift to other property owners like businesses and apartments. So property taxes will be very much an issue this go-around -- including the Save Our Homes exemption.
On the "budget" side of the ledger, the last time we had a commission like this, in 1991-92, the constitution was amended to open up the state appropriation process somewhat -- basically giving legislators and the public three days to read the spending bill before a final vote. The most meaningful change, though, was probably the constitutional requirement of a "rainy day" fund equal to 5% of state spending. This was a huge help when state sales-tax revenue dropped dramatically after the 9/11 tragedy. That last commission did its work during the economic blahs that followed the first Iraq war. Back then, state spending was being cut, and the commission focused mostly on where it could get more money to pay for such services as Medicaid for people thrown out of work.
This time around is very different. The good times have rolled for a few years now. Local taxes have soared with property values, and state sales taxes have been boosted by relentless consumer spending.
Fresh in everyone's mind in 1991-92 was the tax reform (and unreform) that killed the re-election of Gov. Bob Martinez in 1990. Martinez championed a broadening of the sales tax to services and got it through the Legislature. But amid the inevitable grousing, he got cold feet. By December, the services tax was repealed. Martinez had managed to make everybody mad, and Lawton Chiles beat him in the 1990 election. (Former state Sen. Curt Kiser said recently that he thought the criticism was fading even before Martinez gave in, and the state sales tax might now be more like 5% instead of 6.5%.)
The 1991-92 group recommended -- but didn't put on the ballot -- eliminating the constitutional ban on personal income taxes, eliminating most sales-tax exemptions, imposing the sales tax on professional services and extending the corporate income tax to partnerships and subchapter S corporations. It also noted without recommendation replacing the array of business taxes with one comprehensive business tax based on "valued added" by the business.
Those proposals went nowhere. As Senate president in 2000-02, John McKay revived the effort, was shut down in the Legislature, tried to push the plan as a constitutional amendment, got turned away at the Florida Supreme Court and now is facing Supreme Court review of a new initiative for the 2008 ballot. At this point, the commission might just do the work for him.
All those ideas inevitably will be back, along with talk about "productivity and efficiency." The ban on a state income tax isn't at much risk. As McKay put it, "An income tax on the ballot would be a death knell for all the commission's amendments."
Sixteen months from January 2007 to May 2008 (the deadline for proposed amendments) is not a lot of time for this major undertaking. But that's what they've got. And you can bet a lot of people will be lined up with a hand on their wallets, arguing, in the words of the late U.S. Sen. Russell Long of Louisiana, "Don't tax you, don't tax me, tax that fellow behind the tree." Every Sunday This new section will help employers fi nd qualifi ed active and passive job seekers quickly.
