Property Tax-Cut Package May Cost Schools $2 Billion

By CATHERINE DOLINSKI The Tampa Tribune

Published: Oct 16, 2007

TALLAHASSEE - Schools would lose $2 billion over the next four years from a property tax-cut plan that zoomed ahead on Monday toward a final vote in the state House and Senate later this week.

Most of the tax-cut package lawmakers are debating in Tallahassee would not carve into the property tax dollars that pay for K-12 public education. But key pieces of the plan would: exempting low-income seniors from paying property taxes, and giving businesses a break on the taxes they pay on tangible personal property.

Over four years, the 100 percent tax relief for poor seniors would reach $2.6 billion; the break on tangible property taxes would reach $700 million. Another proposal, allowing owners of non-homesteaded property to challenge its assessed value, also could cost up to $900 million over four years and affect school taxes as well.

Put together, the proposals could deprive schools of a total of $2 billion by 2011-2012, according to a House fiscal analysis released Monday. Schools receive roughly $12 billion a year through local property tax collections.

Education Debate Reignited

Lawmakers and Gov. Charlie Crist have said they want to hold education harmless. But Democrats on Monday questioned whether the state would honor that commitment - essentially reprising a debate that took place when lawmakers passed a different tax-cut plan in May.

"I'm looking for, again, some assurance that that billion will be made up by the Legislature somehow," said Democratic Sen. Ted Deutsch of Boca Raton, speaking at the Fiscal and Tax Committee meeting shortly before House analysts raised the projected impact on schools from $1 billion to $2 billion.

Committee chairman Mike Haridopolos said the Legislature demonstrated its commitment to fully funding education last week, when it met to shave more than $1 billion out of the state budget. "The smallest adjustment was to education," he said, noting that per-student funding for K-12 education still increased by 5.2 percent over last year.

Democrats said the state revenue losses that prompted the budget-cutting session are reason to worry more.

"They're lying if they say we're going to find another $500 million [per year] for schools," Senate Minority Leader Steve Geller said. "We just cut the budget."

But the plan attracted no opposition from schools during the Senate panel's hearing.

Connie Milito, lobbyist for Hillsborough County Public Schools, said she believes the assurances from lawmakers that, somehow, they will find the money to fully fund K-12 education. "We take them at their word."

State Trumps Local

Cities and counties were less sanguine about the tax plan, which, if approved by voters in January, would write into the state Constitution a limit on local governments' ability to raise property tax revenues.

The plan is similar to the tax-rate rollback law that lawmakers and Crist approved late last spring, and so far has lowered taxes by $2.1 billion. Cragin Mosteller, spokeswoman for the Florida Association of Counties, complained that the new language is too far-reaching, to the point where future Legislatures could interpret it to mean they have authority at the state level to set local millage rates.

John Wayne Smith, legislative director for the association, theorized that lawmakers want the provision in the state Constitution because they fear a legal challenge to the tax rollback that took effect this year. But the proposed Constitutional language, he said, gives them excessive authority.

Haridopolos said it was a policy decision based on popular opinion among Florida residents. "This is something we think they would like to see."

The senator also said he was "comfortable" with the estimated impact on schools. Without tax reform, he said, Florida's houses will lose value, depressing the amount of tax dollars available to schools. Only by stimulating the market, he said, will schools be assured of adequate resources.

But House Minority Leader Dan Gelber complained that the tax plan has grown too large, beyond the original emphasis on making the Save Our Homes protection portable and providing a tax break for first-time homebuyers.

"I don't think Floridians want a tax break that is funded out of school dollars," said Gelber, D-Miami Beach. "I think my colleagues need to realize that portability is one of the main things we wanted to look at, and we can do that without decimating public schools."

The House Government Efficiency and Accountability Council approved the tax plan on Monday; the bills head today to the House Fiscal Policy Council. The Senate Finance and Tax Committee votes on the bills today. Lawmakers in both chambers expect floor votes on the package Wednesday or Thursday.

Reporter Catherine Dolinski can be reached at (850) 222-8382 or cdolinski@tampatrib.com.