Wednesday, April 25, 2007

Crist rejects regressive sales tax hike



"Crist: Don't increase the sales tax
With the House and Senate stalled on property tax cuts, the governor weighed in.
BY MARY ELLEN KLAS AND MARC CAPUTO
meklas@MiamiHerald.com
PHIL COALE/AP

Gov. Charlie Crist talks to a group of builders, contractors and home building professionals at the Florida Capitol for a rally on property tax reform on Tuesday in Tallahassee.

TALLAHASSEE -- As legislative negotiations over cutting property taxes stalled for a second day, Gov. Charlie Crist entered the arena Tuesday, signaling he rejects a House idea to hike sales taxes to make up for deep property tax cuts, but also wants bigger cuts than the Senate is offering.
Crist called the House plan to eliminate property taxes on primary homes and replace them with a 2.5-cent hike in the sales tax ''an intriguing idea,'' but added: ``We have to do the doable, though.''
The governor's comments came as Senate leaders rejected the House proposal as ''unpassable.'' House leaders then rebuffed a Senate offer to deepen its proposed tax cut to $15 billion over five years -- $3 billion more than the Senate's previous position.


The House lead negotiator, Republican Rep. Dean Cannon of Winter Park, said the tax savings offered by the Senate are ''statistically insignificant,'' compared to the House's promise to save $44 billion over the same time.


Though Crist appears to oppose a sales-tax increase, he is closer to the House when it comes to forcing local governments to scale back their tax bases to the 2004 or 2005 budget year. That position alone may help bickering legislators refocus their discontent on a common foe: local governments, which have seen their revenues rise $50 billion statewide in the past eight years.

WASTE CITED
In a 13-page document prepared by the governor's policy and budget staff, the governor listed 13 examples of waste in government and presented a chart that labels responsible growth at 42 percent across all government services, rather than the higher levels counties and cities have experienced.
The House also has made governments the foe in the tax wars, suggesting that legislators are concerned only about how taxpayers -- not governments -- fare under the cuts.
Crist appears to be leaning toward the Senate position on other issues, however. He supports allowing homeowners to take savings from the state's property tax cap with them when they move, a practice known as portability.
He didn't indicate, though, whether he supports the Senate approach of imposing a higher tax cap for homeowners who take advantage of the savings. And he supports the Senate proposal to give first-time home buyers a tax break.
The governor also appears to be holding firm to the idea of doubling the homestead exemption, now at $25,000, for all homeowners. The idea has not been included in either the House or Senate tax-cut plans.
The governor's office estimated the total savings under his proposal at $23 billion over five years and $2 billion to $3 billion next year, depending on which year the tax rollback occurs. The average savings for homeowners would be either 6.5 percent or 9.3 percent.
`IDEAS ONLY'
The document offers no specifics but was titled: ``Governor's Recommendation to Legislature, Property Tax Reform.''

Crist, who until now has made only upbeat but vague comments about the Legislature's property tax proposals, crossed out those words and wrote ''Ideas only'' before it was distributed to the press.
As Crist conducted the first in a series of hastily called town hall meetings on property taxes in West Palm Beach Tuesday night, the talks between the House and Senate soured.
Senate Republican Leader Dan Webster of Winter Garden used his most forceful language yet when he said the chamber considers the House plan unpassable, because it relies on a constitutional amendment to swap property taxes for sales taxes.
He said he is ''100 percent sure'' the House plan will never win the approval of two-thirds of voters it needs to pass. Though eliminating all property taxes on homesteaded homes would make homeowners happy, he said, the idea would antagonize other voters, such as renters and the owners of businesses or second homes.
So legislators should focus on rolling back property tax collections to provide immediate tax savings, Webster said.
STILL WAITING
After the Senate made its offer, Cannon, the House's lead negotiator, said his chamber is ''still looking forward'' to the Senate plan, as if one hadn't been offered.
As Cannon spoke, Sen. Mike Haridopolos, the Melbourne Republican who leads Senate negotiations, stood shoulder-to-shoulder with him. Both faced forward, barely looking at each other and speaking to reporters instead.

''The numbers don't lie,'' Haridpolos said firmly. ''The numbers are clear: $15.33 billion. That's movement,'' he said.

He noted that the original Senate plan called for $12.3 billion in savings over five years. Counties would roll back their tax base by $8.8 billion and cities by $3.7 billion. Special taxing districts, such as water management districts and children's services councils, would see their tax base cut $422 million.

''We have made a positive step forward today,'' Haridopolos said. ``We expect that positive steps will be made forward in the counter offer.''
Said Cannon: ``At this rate, it may take us a couple years to get to our numbers, but that's OK. We'll wait till we get there.''"

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