Property Tax Reform Shelved

By JEROME R. STOCKFISCH The Tampa Tribune

Published: May 3, 2007

TALLAHASSEE - After 8 1/2 weeks of talks on widely differing property tax reform proposals, Senate and House negotiators threw in the towel Wednesday and decided to tackle the issue in a summer special session.

Despite earlier declarations that ending the legislative session without property tax reform would amount to failure, chamber leaders spun the strategy as positive and said they were confident a deal would be reached in the session set for June 12-22.

"This Legislature is not leaving; we're going home to continue to work on it," said House Speaker Marco Rubio, R-Coral Gables. "And we're coming back in less than a month to vote on a date certain on property tax reform.

"Our overriding goal was not to be out there holding hands on May 4," Rubio said, gesturing to the Capitol rotunda where closing ceremonies take place Friday. "Our overriding goal is to make sure the next time the people in the state get a property tax bill, it's a bill they can afford to pay. And we think that we're going to accomplish that. That's why we're very optimistic."

Rubio and Senate President Ken Pruitt, R-Port St. Lucie, announced to their respective chambers shortly before noon that the impasse between the two chambers would not be bridged by the end of the session.

As late as Tuesday evening, the legislative leaders and their chief negotiators expressed confidence a deal could be reached. Wednesday, they were vague over the details of the change in strategy.

"You just have that moment where you know that you just can't get there," Pruitt said. "It doesn't mean that you don't want to, and yeah, you could probably do something in a hurry and get it all together. But at the end of the day, crossing the T's and dotting the I's and putting the details in there is just as important as coming up with the concept."

Large Gap In Rollbacks

The two chambers were far apart on proposals to provide relief to local taxpayers who have seen their tax bills soar along with property values. In Hillsborough, for example, property tax revenue has risen more than 93 percent from 2001 while the population has grown 16.2 percent and inflation has risen 15.6 percent.

A House plan would force local governments, except school districts, to roll back local revenue to 2001 rates. It also would ask voters if they want to eliminate local property taxes altogether in exchange for a 2.5 cent increase in the state sales tax.

A Senate plan suggested a more modest rollback, to 2006 rates, and would have allowed those who move to take their Save Our Homes valuation benefit with them.

Rubio and Pruitt cited the time crunch and the need for caution in opting for a special session. Because any compromise would make fundamental changes in Florida tax structure, the legislation would require voter approval of a constitutional amendment.

"When you're going to put something in the constitution, you have to make sure you know exactly what it does," Rubio said. "That means you have to run those numbers through models and understand what the impacts are on taxpayers, what the unintended consequences can be, what the glitches might be. It's in the constitution. You can't come up here next session and change it. You have to go back on the ballot and change it."

That suggests the two chambers may have moved toward common ground in closed-door talks. Rubio and Pruitt were stingy with details.

The Senate stood firm in refusing to consider the portion of the House plan that increased the sales tax. It could not be determined whether House negotiators had backed off their stance, but Rubio said in a news conference that a compromise "could be done without revenue replacement." That might suggest that a deal does not require a component such as his proposed sales tax swap or new schemes that have surfaced such as a plan to pump new gambling revenue into the property tax mix.

Asked directly whether the sales tax issue was off the table, Rubio said, "I don't think it's off the table, but it's also not an impediment."

Gov. Charlie Crist said he was disappointed an agreement could not be reached, "but I'm not disheartened. I remain optimistic that the prospect of having property tax reduction this year is going to happen."

'This Is Complicated Stuff'

Crist had offered a proposal of his own that split the major differences in the chambers' proposals, but didn't touch on a sales tax increase and mimicked many of the Senate plan's provisions.

"We want to make sure we get this right, because this is a big deal," Crist said. "This is not simple. This is complicated stuff. And complicated stuff deserves time."

Tampa Mayor Pam Iorio said she thinks lawmakers were wise not to rush to change the tax structure.

"That's a good move on the part of the Legislature," Iorio said. "This is a complicated issue to wade through."

Iorio has been vocal about the detrimental effects the proposals could have on the city's budget: tens of millions of dollars a year.

She has said cuts to the police, fire, and parks and recreation departments would be necessary if either plan passes. She also has said redevelopment efforts would stall.

Last month, Iorio sent some legislators packets detailing how property tax cuts could threaten the redevelopment of Central Park Village and Tampa Heights.

In the month before the special session begins, Iorio said she would look for ways to be helpful to legislators as they contemplate ways to reform the property tax system.

Meanwhile, the city will forge ahead on developing a budget for the fiscal year that starts Oct. 1.

Typically, city staff members meet with council members in June to talk about budget priorities. The mayor then presents her recommended budget to the council in August, and two public hearings are held in September. The budget must be approved by Sept. 30.

The city hopes to stay on schedule as much as possible.

"It's going to certainly make it very tight," said Bonnie Wise, the city's director of revenue and finance.

Hillsborough County Administrator Pat Bean also said the special session will leave little time to prepare a draft budget, which normally would be presented to commissioners June 6 and approved by mid-July.

She said the delay probably won't help county employees, who will have to wait a bit longer before finding out whether their jobs will be kept or eliminated.

"It continues a level of anxiety for folks wondering, 'What does this mean?'" Bean said.

In Tallahassee, leaders said the timing of the special session should not be an issue to local governments. "There's plenty of time for their budget workshops. We're still going to give them plenty of time to do their due diligence," Pruitt said. "I think it's also going to be a time for reflection, as well. Hopefully, they'll go into it knowing that our goal is the same: It's not a matter of 'if,' it's a matter of 'how much.'"

In Tampa, department heads were told weeks ago to prepare "no-growth" budgets. They will need to adjust accordingly.

"It's going to be a much more tentative budget process as we proceed," Iorio said.

Bean also said she's hopeful that the extra time will allow lawmakers to consider the effects of their cuts.

Reporters Ellen Gedalius, Anthony McCartney and Catherine Dolinski contributed to this report. Reporter Jerome R. Stockfisch can be reached at (850) 222-8382 or jstockfisch @tampatrib.com.