JaxPoliticsOnline.com

Observations and musings on Jacksonville Politics

Revamping State’s Tax System a Futile Effort

I just couldn’t pass up a news article with notable quotes from our own colorful legislator, Senator Jim King, about anvils around the neck in the deep end of the pool and driving a stake through the heart of Joan of Arc.  From the HeraldTribune.com:

Florida’s lawmakers and Gov. Charlie Crist are prepared to ask a few Floridians to help carry the entire state over a $6 billion budget hole, ignoring long-term fixes for a tax system that critics call an unfair and antiquated factor in the state’s dire fiscal crisis.

Lawmakers hope to patch the budget hole by taxing smokers and gamblers, asking college students to pay more to attend state schools providing less, considering four-day school weeks and adding nearly $1 billion in increased fees on everything from driver’s licenses to landfills.

Devoid of an income tax and heavily reliant on newcomers buying and building homes, Florida’s tax system was dubbed a “Ponzi scheme for financing government” in a report issued last week by the University of Central Florida’s Institute for Economic Competitiveness.

“We are seeing a breakdown in the financing of government across Florida; the continuing influx of population that provided the additional revenues needed to prop the system up has evaporated, and the pyramid is collapsing all around us,” the report says.

Florida is one of seven states without an income tax. The Save Our Homes cap on annual property tax increases for homeowners further limits government revenue. Then there are numerous exemptions to the state sales tax, ranging from legal and accounting services to pet care, dry cleaning and haircuts, which critics say amount to billions of dollars in lost revenue.

Despite decades of warnings that the state’s reliance on sales taxes and real estate shuffling was too flimsy to pay for an education system consistently ranked near the bottom of the nation or a prison system facing an increase from 100,000 to 125,000 inmates in the next few years, lawmakers have rarely made an effort at substantial change.

And they are not doing it this year.

One reason is political fear.

“If you vote for a tax, no matter what that tax is, your opponent will find some way to put an anvil and the tax around your neck and throw you in the deep end of the pool,” said Sen. Jim King, R-Jacksonville.

Lawmakers are also wary of making changes to a tax system that might be fairer for the entire state but inevitably raise taxes on many.

“The whole revenue system is broken and it’s so badly broken that it takes a lot of courage to talk about fixing it,” said Rep. Keith Fitzgerald, D-Sarasota, and a political science professor at New College.

Fitzgerald cites his own personal example of buying a home in the early 1990s as the Save Our Homes cap on property taxes took effect. He said someone buying his home today would pay eight times as much in property taxes.

“Really, who has the political courage to go to people all across the state, people like me, who benefit from this and say, ‘Sorry. The jig is up,'” he said.

Similarly, businesses that employ hundreds of lobbyists to protect their corporate income and sales tax breaks provide an overwhelming wave of opposition in Tallahassee.

Last week, King proposed a one-cent per gallon increase on the state gas tax to provide $45 million in incentives for companies pursuing renewable energy technology and $45 million to the state’s general budget.

“You would have thought I had taken a wooden stake and driven it into Joan of Arc’s heart,” he said, mimicking the opposition. ” ‘Oh my God. That’s a penny sales tax. We don’t want to do that.’ But if we don’t finance it with that, what are we going to finance it with?”

But other lawmakers say bad economic times are not an occasion to raise taxes.

“I don’t think there’s anything magical about the current level of taxes,” said Rep. Ellyn Bogdanoff, R-Fort Lauderdale, the chairwoman of the House Finance and Tax Commission. “What you do know is that going up doesn’t seem to make a lot of sense in this economy when people have less. It asks the people to give more money to government and that’s not something we should do in bad economic times.”

Instead, the House budget proposal would raise nearly $1 billion in fees on driver’s licenses, fishing licenses, court costs and myriad other things. Bogdanoff said the increase reflects higher costs for government to provide those services, but some of the new revenue would also pay for other things like schools and prisons.

“Any time you put your hand in my pocket and take my money, it’s a tax. Why don’t we just call it that,” said Rep. Joe Gibbons, D-Hallandale Beach. “We can’t hide it.”

But there are more pragmatic, non-political reasons for the Legislature’s inability to make big changes.

Senate and Finance Tax chairman Thad Altman, R-Melbourne, is leading Senate Republicans in pushing an increase in the cigarette tax and elimination of loopholes for businesses and real estate transactions that could raise total revenue by hundreds of millions of dollars.

He said the simple matter of time, with only about 40 to 50 days of meetings in Tallahassee every year and term limits that reduce the number of seasoned lawmakers, makes big change difficult.

“We just can’t think of the budget at hand; we must think long term,” he said. “With experience you learn that the single issues really are not going to determine an election one way or another. It requires a deeper level of evaluation. A lot of these revenue sources will create wealth, they’ll add prosperity” by improving roads and schools.

Former House speaker and senator Dan Webster, R-Winter Garden, battled unsuccessfully in 2007 to phase out Save Our Homes over decades with an eventual equity for property taxes in the state. He served for 28 years in the Legislature. He said term limits have hindered long-term vision.

“There’s more fear because there’s more to fear with less knowledge,” he said. “I think the members have these fears and then they have the thought that this (downturn) is going to be temporary. Of course, we’ve been saying that to ourselves for years.”

Advertisements

Filed under: Florida, Florida Legislature, Florida Politics,

%d bloggers like this: