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Tax-cut debate turns vicious in state capital
SOURCE: Tallahassee Bureau
Jason Garcia and John Kennedy
April 26 2007

TALLAHASSEE -- The property-tax debate took a rancorous turn Tuesday that one leading Republican senator said came down to a battle of rich vs. poor.

Senate Republican Leader Daniel Webster's target was the centerpiece of the House's property-tax plan, a constitutional amendment that ultimately seeks to eliminate all property taxes on primary homes but adds as much as 2.5 cents a dollar in sales tax.

"The sales tax is a regressive tax. And the more you raise it, the more regressive it becomes," Webster, R-Winter Garden, said. "The poor are going to get poorer, and the rich are going to get richer.'

But House Republicans showed no signs of budging as the two chambers spent a second day doing more posturing than negotiating. The rhetoric flew despite a self-imposed, one-week deadline set by lawmakers to reconcile radically different approaches to the issue that has come to dominate this year's legislative session, which is scheduled to end May 4.

After one fruitless negotiating session broke, Webster and Rep. Thad Altman, R-Melbourne, began arguing with each other, politely but insistently, in front of a small group of reporters. After another, the two chambers' chief negotiators, Rep. Dean Cannon, R-Winter Park, and Sen. Mike Haridopolos, R-Melbourne, traded thinly veiled insults even while standing, smiling, side by side.

Is governor leaning?

But the Senate could be on the verge of picking up a powerful ally. Gov. Charlie Crist's staff has recommended that the governor endorse a plan that involves no sales-tax increase, according to documents Crist was briefed on earlier this week.

Crist, who has been careful to avoid taking sides in the dispute so far, hinted at the possible alignment with the Senate when asked about the House's tax swap. Floridians would have to approve the idea by a two-thirds vote -- a threshold critics say it's unlikely to meet.

"It's an intriguing idea," Crist said. "We have to do the doable, though."

The stalled negotiations came even as dozens of home builders from across the state rallied outside the Capitol pushing lawmakers to expand any property-tax overhaul by pairing it with limits on impact fees levied against new construction.

Home builders, heavy contributors to Florida's Republican Party, have fought impact fees for years in the courts and Legislature. But this spring, with rollbacks in property-tax rates likely to win approval, the construction industry fears local governments will increase impact fees to offset an expected loss in tax dollars.

An increase in impact fees would add more to the price of homes, further hurting a housing industry already staggered by a sluggish economy, high taxes and steep insurance costs, leaders said.

"Home builders don't pay impact fees," said John Wiseman, president of the Florida Home Builders Association. "Home buyers pay impact fees."

Central Florida counties have long had among the highest impact fees in the state. Lake County is considering a boost in school-impact fees that industry officials say would bring the county's total fees to nearly $30,000 per home.

"We oppose any limit or cap on our ability to assess impact fees," said Cragin Mosteller, a spokeswoman for the Florida Association of Counties.

But agreement on any tax-related issue at all appears a long way off.

House's 2-part plan

Speaker Marco Rubio, R-West Miami, and House Republicans have offered a two-part plan that would begin by forcing cities and counties to roll back their property-tax collections to inflation- and growth-adjusted 2000-01 levels. They then would ask voters to approve a constitutional amendment aimed at wiping out property taxes on primary homes in favor of the higher sales tax.

Senators have countered with a plan that would roll back property taxes to 2005-06 levels. They also want to double the $25,000 homestead exemption for first-time home buyers and allow homeowners to carry a portion of savings they accrue under the Save Our Homes tax cap when they move to a new home.

The two sides haven't moved since House Republicans declared that any property-tax plan ultimately must produce average tax cuts of $1,200 a year for primary-home owners, $750 a year for other homeowners and $3,300 a year for commercial-property owners. That's roughly the amount of savings that would be produced by the House plan.

Sweetened Senate offer

But senators say they have no interest in raising the sales tax, and, without it, they say that such cuts would decimate local governments.

Senators sweetened their own offer somewhat by expanding their rollback beyond cities and counties to include local taxing authorities such as water-management districts. The move, they said, would raise the tax cuts in their plan to more than $15 billion during five years, compared with more than $40 billion during the same period under the House plan.

But Cannon called the Senate changes "statistically insignificant," while other House members criticized the Senate plan for doing nothing to address the inequities created by Save Our Homes, which allows some longtime homeowners to pay far less in taxes than more-recent buyers.

Crist's office, according to documents, would like to see a five-year reduction of $23 billion.

~end~