Tax-cut Letdown: Numbers May Not Add Up

Posted by Jeffrey G. Funk P.A. on Wednesday, June 13th, 2007 at 10:12pm.

On the first day of the special session to lower property taxes, here is what lawmakers started cutting: expectations for a huge tax cut this year and a January vote for even bigger savings.

The Republican-led Legislature didn't appear to have the votes Tuesday to push deeper cuts more quickly because Democrats oppose $7.2 billion in school cuts over five years in the $31.6 billion plan.

But the schools dispute belies the real trouble: It's almost impossible to fix the complicated tax system, protect local services and fulfill simple promises made by Gov. Charlie Crist and House Speaker Marco Rubio, who have raised public expectations of deep tax cuts.

The two Republicans have barnstormed the state separately for months. Rubio held out for bigger cuts in the recent legislative session, promising people will get a tax bill they can afford. Crist repeatedly pledged a reform that will send a sonic boom that will kick start the state economy when taxes drop like a rock.

That's not likely.

Taxes will drop, but more like a pebble, conceded Sen. Jim King, a Jacksonville Republican. A lot of people are expecting more than they're going to get.

Not enough

A number of Republican legislators said taxpayers were telling them the first phase of the plan, calling for an average 7 percent savings this year, isn't enough. The plan uses tax rollbacks and caps that would cost local governments about $15.6 billion over five years.

The second phase calls for about $16 billion in homeowner savings, but takes money from schools. This phase, which requires a constitutional amendment, would need approval from 60 percent of voters.

To make the Jan. 29 ballot, legislative leaders need a three-fourths vote of each chamber.

Democrats say they are not going along, and their support is critical in the 39-member Senate. Even if all 25 Republicans voted for it they would need six of the 14 Democrats to get it on the special-election ballot.

Republicans, who plan to pass the cuts and put the proposal on the November 2008 ballot by weeks end, accused the Democrats of simply opposing tax cuts and hiding behind kids to mask their agenda. The Republicans said they would find schools money somewhere in the budget next year.

Sen. Al Lawson, a Tallahassee Democrat who will lead his party next year, said Rubio and Crist boxed us in by calling for big cuts that could be made only by hitting schools, which legislators had planned to leave alone.

I don't care if they say I'm against tax cuts, which isn't true. I'm not cutting schools, he said.

The GOP doesn't need the Democrats help in either chamber to put the measure on the Nov. 8, 2008, ballot. That requires only a three-fifths vote in each chamber, which the Republicans have.

In a strange twist, Democratic Leader Steve Geller of Cooper City said it's absolutely possible Democrats would consider putting the measure on the January ballot if it was destined to go on the November ballot anyway.

Meanwhile, pressure to protect municipal budgets is mounting from firefighters to nurses to teachers. The House convened a special meeting to hear their concerns Tuesday but made it clear that the bills would not change.

Van Church, lobbyist for workers at Jackson Memorial Hospitals Service Employers International Union, warned that the hospital district could lose $56 million of $140 million. “This is a recipe for human misery, he said.

Miami-Dade County Commissioner Katy Sorenson urged House members to be careful. There are too many voices missing from the conversation, she said, such as the elderly single mother who relies on the city park program and library for child care or the child who gets FCAT tutoring at the county library. These are the citizens who will see their service levels decline.

Rubio said tax-cut opponents create confusion, and they misstate the facts.

He suggested House Democrats were hypocrites because they themselves offered a tax-cut plan that would have reduced school money. Democrats said their plan sought to plow money back into schools, while Rubio acknowledged he didn't know where the state would find the money to make up for the $7.2 billion shortfall.

Will of the people

Rubio said the compromise plan reflected the will of the people and warned that if lawmakers don not pass the tax-cut plan, citizens will do it for them.

As he spoke, a group of 150 elderly homeowners bused from Miami by Rubio supporters were gathering outside the Capitol to launch a petition drive seeking deeper cuts.

About 19 percent of voters say Rubio, a West Miami Republican, is doing well on the tax issue, but 39 percent disagree, according to a Zogby International poll. Crist's numbers: 54 percent positive, 35 negative.

Gov. Crist downplayed his role in pumping up expectations, saying what concerns me is that the people get relief.” He said the saving grace of the plan is that the people will make the decision.

But if voters don't go along, taxes won't drop like a rock. Miami Republican Sen. Alex Diaz de la Portilla said the first-year savings won't give taxpayers a Wow! moment, and they could blame the governor. The governor has got himself in a corner in that he has over promised and he is going to under deliver, he said. He has raised expectations that are not necessarily responsible ones for state government, and he's going to have a very difficult time getting out of that.

Copyright © 2007 The Miami Herald, Marc Caputo and Mary Ellen Klas. Distributed by McClatchy-Tribune Information Services. Miami Herald staff writer Gary Fineout contributed to this report.

Jeffrey G. Funk, P.A.
Realty Executives Central Florida
7932 West Sand Lake Road • Suite 302
Orlando, FL 32819
Office: 407-438-4028
Fax: 407-536-4328
Email: jeff@realtyinorlando.com

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