House Approves Two Tax-Cut Bills

TALLAHASSEE, Fla. – April 19, 2007 – The state House of Representatives voted unanimously Wednesday to roll back property taxes to 2001 levels, while also passing, along party lines, a second plan to rewrite Florida’s tax code and give voters the option of eliminating property taxes on their homes by raising the sales tax.
House Democrats said they support the rollback bill because it sends the message they support tax cuts, but warned that they want it revised to have a less harsh impact on local government.
The second plan, advocated aggressively by House Speaker Marco Rubio, won a divided vote of 78-40, with only two Democrats, Reps. Luis Garcia and Ed Bullard, both of Miami, voting with Republicans. Two Republicans, Reps. Gayle Harrell of Stuart and Andy Gardiner of Orlando, voted against it. None explained their votes.
The measures are the first step to a resolution on the top issue of the legislative session: lowering property taxes across the state. Neither approach is expected to be accepted by the Senate but will serve as the starting point in the debate to begin next week when a joint committee hammers out the differences.
Under the House plan that passed on a partisan vote, voters would be asked in November 2008 to approve a constitutional amendment to lower property taxes across the state by $4.4 billion by 2009. Local governments then would have to roll back taxes and cut their budgets.
If voters approve the constitutional amendment, it would immediately strip away all taxes that pay for schools and automatically raise the statewide sales tax by 1 cent. After that, counties would have the option to eliminate all property taxes on homesteaded property and replace the lost income with a local sales tax of up to 1.5 cents more.
Republicans called the plan bold, innovative and the “largest tax cut in the history of Florida.” They promised that it would have wide-ranging benefits not just to homeowners but to businesses and renters, who would also see their tax bills drop while homeowners see the biggest declines.
“This isn’t to protect government, this is to protect the taxpayer,” said Rep. Ray Sanson, a Destin Republican.
Democrats argued that the proposal will have far-reaching negative consequences. Renters and businesses would see little relief, while homeowners see the greatest benefit. Low- and middle-income homeowners would shoulder the greatest share of the sales-tax increase while seeing the least benefit. And the elimination of the property tax on homes, they said, would result in a more apathetic citizenry and a vulnerable state financial system that could jeopardize the state’s bond rating.
“We support the tax cuts. We support the rollback,” said Rep. Dan Gelber, the House Democratic leader from Miami Beach. But the other proposal falls short, he said, because “you’ll be sending everybody to the polls to vote for a sales tax increase that only benefits some people.”

Copyright © 2007 The Miami Herald, Mary Ellen Klas. Distributed by McClatchy-Tribune Business News.
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