TALLAHASSEE, Fla. – Sept. 8, 2008 – Tax reform in Florida was dealt a major setback last week when the proposed Amendment 5 was struck from this fall’s ballot, advocates say, but there’s no shortage of fallback plans on the horizon.

From grassroots groups, who say Amendment 1’s property tax changes didn’t provide enough relief, to state leaders feeling pressure from constituents, tax reform in Florida is far from complete.

Amendment 5 would have asked voters to “swap” almost half of all school property taxes with a one-cent sales tax increase and other unspecified revenues. Florida legislators would have been expected to come up with billions from untaxed goods and services.

The Florida Supreme Court ruled the measure was too complex to appear before voters, effectively killing an idea former state Sen. John McKay has touted for years. As a state senator from 1990 through 2002, the Bradenton businessman tried to broaden the tax base with a similar overhaul that would have eliminated scores of sales tax exemptions and exclusions.

“I’m not sure what happens next,” McKay said. “The Legislature hasn’t shown a real inclination to enact tax reform … We’ve got to change the tax system because of the changing structure of the tax system. There’s no doubt the No. 1 concern around the state is property taxes.”

McKay was also a member of the influential Tax and Budget Reform Commission, a board that meets every 20 years comprised of a who’s who among business leaders, former elected officials and economic minds. The TBRC had the unique ability to place constitutional amendments before voters, but the court had the final say on Amendment 5.

“The best way to do it is to have the Legislature review all the exemptions,” said state Sen. Mike Bennett, R-Bradenton. “That’s the easiest way rather than get it on the Constitution. Replacing property taxes is extremely difficult. People would vote for something if they saw the legislative bodies working toward common-sense tax reform.”

A logical step?

The Amendment 5 ruling may not have been entirely popular, but it was welcomed by the Florida Chamber of Commerce and Florida TaxWatch. They contend the measure would have done nothing to limit government spending or to address the state’s taxing inequities.

“The point is, our property tax burden is much higher than other states,” said TaxWatch president Dominic Calabro. “The real problem that’s often camouflaged is who’s shouldering the greater share of the burden. It’s not being felt by long-standing property owners. It’s new homeowners, businesses, non-homesteaded property owners and small business owners.”

Grassroots groups across the state like Manatee’s Coalition Against Runaway Taxation are meeting this weekend in Orlando to plot their next move. Disappointed but not defeated by the Amendment 5 ruling, those groups say they’ll put pressure on state leaders to address a tax system that puts an unfair burden on landlords, snowbirds and business owners.

Their fallback plan is another potential constitutional amendment that could appear on the 2010 ballot. It’s a citizen-initiated plan begun last year that would cap property tax on all parcels at 1.35 percent of their taxable value.

Copyright © 2008 The Bradenton Herald, Fla., Nicholas Azzara. Distributed by McClatchy-Tribune Information Services.

 

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