BRADENTON, Fla. - Florida TaxWatch yesterday said a constitutional amendment on the ballot in a statewide referendum in November will likely cost far more to implement than the property tax cuts it proposes.
The issue, known as Amendment 5 on the ballot, is yet another in a series of tax-reform proposals in Florida, where property taxes soared during the real estate boom years.
Amendment 5 would abolish the majority of property taxes the state Legislature requires school districts to levy in return for state funds. It would not eliminate a 2 mill property tax that school districts can levy for capital outlay or impact debt service payments for certificates of participation or general obligation bonds.
To offset the loss of the school property tax, the amendment authorizes - but does not require - the Legislature to increase the sales tax by one cent. It also suggests lawmakers devise more revenue for schools by eliminating some sales tax exemptions, except exemptions for food and health care.
Florida TaxWatch - which describes itself as a private, nonprofit, and nonpartisan research institute -
"At best, Amendment 5 is a risky gamble with Florida's future. At worst, it's an economic and fiscal train wreck waiting to happen," said Dominic Calabro, president of Florida TaxWatch.
The organization's analysis questions the ability of the state to raise revenues through other sources, such as a sales tax, at a time when sales taxes and most other fees supporting the budget are declining because of the economy and real estate market.
The amendment also would lower the amount annual assessments can increase on commercial property and non-homestead property to 5% from the current 10%. While the cap would not apply to school district tax levies, it would further erode revenue that cities, counties, and other special districts now raise through property taxes.
"If Amendment 5 were real tax reform - a responsible tax cut benefiting a broad cross section of Florida taxpayers and likely to stimulate Florida's economy - then Florida TaxWatch would support it," Calabro said. "Our analysis shows that it is not, and we don't."
The Florida Association of Realtors on Tuesday called the amendment "significant" tax reform and kicked off a statewide campaign urging voters to support it. FAR, which calls itself "the voice for real estate in Florida," also said it would spend $1 million on the campaign to educate Florida voters about the benefits of Amendment 5.
Rating analysts are concerned about the impact should Amendment 5 and a separate tax-cutting measure that may be on the November ballot pass. That, and a tax-reform initiative already passed by voters in February, may stress the budgets of local governments and ultimately the state.
