Florida House Speaker Marco Rubio has joined a coalition of tax revolt groups from across the state in calling for residents to sign a petition for a November 2008 ballot amendment that promises to cut property taxes by an average of 25 percent.
The plan, endorsed by groups including Manatee County’s Coalition Against Runaway Taxes, or CART, would set tax rates for all Florida businesses and residents at 1.35 percent of a property’s taxable value.
Savings for businesses and residents would differ depending on where a property is and when it was purchased.
People who bought their homes in 2005, for example, would benefit more than people who bought in 1995. And businesses in coastal areas, where appreciation during the recent housing boom was precipitous, would benefit more than businesses on the mainland.
But that is the whole point of the plan, dubbed the “1.35 percent solution.” It is meant to address the needs of businesses, landlords and owners of second homes, the groups who have felt left out of the tax plan that the Legislature is putting before voters on Jan. 29.
Proponents of the 1.35 percent proposal estimate that it would reduce tax collections by nearly $8 billion, prompting state and local governments to trim their budgets or look elsewhere — possibly through higher sales taxes — to make up the shortfall.
“I anticipate that tax-receiving entities are not excited about those reductions,” said Lee Sullivan, president of the Bay Tax Foundation.
But Sullivan and other members of tax revolt groups are convinced that governments throughout Florida can make the cuts.
“If you look at where government spending was in 2000 and where it is now in 2007, and you ask yourself what extra services are being rendered, you will come to the obvious conclusion that there are areas in which government can cut or restrict spending,” said Tom Gaitens, Florida field coordinator for FreedomWorks.org. “I’m a true believer that increases in government spending should be limited to inflation and population growth.”
Getting their measure on the ballot, though, will be an uphill battle. The groups must get 61,000 signatures by the end of this month, and then 10 times that many by the end of January.
“I seriously doubt they will get enough signatures by Feb. 1,” said Lee County Property Appraiser Ken Wilkinson, considered the father of Florida’s Save Our Homes legislation. “It’s going to be arduous at best. But it’s certainly more doable than our ‘Save Our Homes’ initiative, because we didn’t have the Internet.”
Donald Schroder, president of CART, said he is “comfortable at this stage” that combined efforts around the state will result in the necessary signatures, especially now that Rubio has agreed to barnstorm Florida on behalf of the proposal.
The speaker is planning a whirlwind tour that will bring him to the Dolphin Aviation Terminal at Sarasota-Bradenton International Airport at 10:30 a.m. Wednesday.
“The speaker has agreed to support the petition and wants to encourage people to sign it,” said Rubio spokeswoman Jill Chamberlin.
Gov. Charlie Crist is supporting the proposed state constitutional amendment drafted by the Republican-controlled Legislature.
Crist is leading a campaign to get it passed as part of his promise to make property taxes “drop like a rock,” but polls show it is having trouble getting the necessary 60 percent support from voters.
Recently state economists reduced a five-year estimate of overall savings from the Legislature-sponsored ballot proposal by $3.2 billion, or 25 percent.
The amendment would let owners of primary homes, known as homesteaders, take up to $500,000 of their existing Save Our Homes assessment savings with them when they move.
A recent estimate of the proposed state constitutional amendment shows primary homeowners who stay put will save an average of $240 a year.
The proposal from the citizen tax groups was originally put forward by Dr. David McKalip, a Pinellas County brain surgeon, who heads the organization Cut Taxes Now.
But it was not until Nov. 24 — the Saturday after Thanksgiving — that other groups around the state coalesced around the idea.
“All the groups got together and decided to do something uniform, make sure we’re all on the same playing field,” said Bernie Navarro of Citizens for Property Tax Reform. “Everyone gelled for the common good.”
The benefit of the 1.35 percent measure is that it is a very simple plan, said Barry Gould, an Anna Maria Island real estate agent and a member of CART.
“The bottom line is that it will provide savings even for those people who already benefit from Save Our Homes,” Gould said.
Gould used the illustration of a Manatee County homeowner who bought a house for $375,000 in 2004. Once Save Our Homes and other deductions are subtracted from that amount, the homeowner’s taxable value comes to $319,000.
Under current tax law, that person’s tax bill is $6,307. But under the 1.35 percent solution it would be $4,307, or $2,000 less.
That is a major savings, and one that would be par for the course for people who bought during the boom. But people who have benefited from Save Our Homes longer might not see any reduction at all, Gould said.
Businesses, landlords and snowbirds would see much-needed savings, though, proponents say.
“The savings might encourage people to go out and buy refrigerators or add onto their homes,” Gould said. “I think it will be a huge stimulant.”
Officials at the Florida League of Cities and the Florida Association of Counties declined to comment on the measure being endorsed by Rubio because they had not had a chance to study the proposal.
There is no question those groups are opposed to tax cuts and tax caps in general.
“They radically alter the relationship between the county commission and local voters,” said the Association of Counties on its Web site. “Revenue caps hinder the ability of the county government to respond to discretionary needs such as increases in law enforcement or improved roads.”
Too bad, says Doug Guetzloe, founder and chairman of Ax the Tax.
“For the last five years, government has been winning at Monopoly and playing with our money,” Guetzloe said. “The bottom line is that government benefited inordinately from the boom. Now the bubble is bursting, they will get squeezed one way or another.
“This plan will just help them tighten their belts a little faster.”