Tax Cuts

Deep cuts to schools jeopardize tax plan

TALLAHASSEE, Fla. – June 12, 2007 – As a special lawmaking session to cut property taxes begins today, a $31.6 billion proposal negotiated last week is facing serious trouble.

The proposal, released late Friday, calls for $7.2 billion in school cuts over five years – $1.2 billion from Miami-Dade and Broward counties alone – and legislators and educators are concerned.

Teachers and parents are joining the chorus of potential tax-cut opponents who, like police officers, firefighters, nurses and environmentalists, once thought their programs would be spared deep cuts but now face them.

Democrats’ votes are needed to put part of the tax proposal before voters on the Jan. 29 ballot, and Senate Democratic Leader Steve Geller of Cooper City blasted the education cuts at a Monday meeting.

Republican leaders say there’s no reason to worry because voters want the record tax cut and will trust them to restore the cuts to education. But even some Republicans are not sure the cuts are a good idea.

“It’s troubling. There’s going to be grave concern over this,” said Rep. Marcelo Llorente, a Miami Republican. “I fought hard for money for Miami-Dade schools, and I’m not interested in cutting that money for them.”

With concerns like that, the 11-day legislative session shows signs of gridlock before it starts. But there remains widespread support for a tax cut this year that requires local governments to cut property taxes for the 2007-08 year, then cap them in the future by allowing the budgets to grow no faster than new construction and personal income.

That part of the plan, estimated to cost local governments $15.6 billion over five years, leaves schools alone and only needs to pass the Legislature by a simple majority.

The second phase, which would cost local governments an additional $17 billion over five years, includes schools because it would change the actual tax base in every Florida city and county. Phase Two would gradually replace the Save Our Homes tax cap with super-sized tax exemptions: a 75 percent exemption on the first $200,000 of a home’s value and 15 percent on the next $300,000. The total allowable exemption next year: $195,000.

Lawmakers also promise an additional $100,000 write-off for poor seniors and more help for owners of marinas and affordable housing.

But it would take 60 percent of voters to approve Phase Two in a constitutional amendment. And it would take a super-majority of legislators, three-fourths of each chamber, just to get it on the ballot.

In the House, Speaker Marco Rubio of West Miami needs all 78 Republican votes plus 12 Democrats to get the proposal on the Jan. 29 ballot. It would take fewer votes – three-fifths of each chamber – to get the proposal before voters in November 2008. In that case, Rubio would need just 72 votes.

One man’s clout

The situation is less clear in the Senate, where controversial education plans have died in large part due to one man: Republican Sen. Alex Villalobos of Miami.

“This is a lot of money they want to cut, and I’m not sure what we get,” said Villalobos, who was ousted as future Senate president and faced a vicious reelection campaign last year after leading the charge to defeat former Gov. Jeb Bush’s plan to weaken the state’s class-size amendment and expand vouchers.

But House and Senate leaders vowed Monday to find a way to restore the schools’ money, suggesting that state money, bonds and a jump in school tax rates are possible answers because all governments could break the new revenue limits by extraordinary votes.

“Every year there’s a ‘trust us,’” said Sen. Dan Webster, the Senate Republican leader from Winter Garden. The Legislature, he said, will continue its commitment “that education would be funded in the best way possible.”

Another big hurdle: the 15-year-old Save Our Homes tax cap, which homeowners love because it limits increases on the assessed value of homestead property to 3 percent a year.

Legislators say Save Our Homes is a failed policy because it shifts the tax burden from homeowners to new home buyers, investors and commercial property owners.

“The only way to fix that is to get rid of Save Our Homes, and until people are willing to say that publicly, it is not going to get repaired,” Webster said.

But he acknowledged that such a fix requires legislators to find a way to give homeowners an immediate tax cut, transfer to them a greater proportion of the tax burden over time, yet not charge them substantially more in taxes in the future. Phase Two of the plan would let homeowners keep their Save Our Homes protection if it’s a better deal.

House Democratic Leader Dan Gelber said the super-exemption plan will be a tough sell in Miami-Dade, Broward and Palm Beach counties, where only half the homeowners would get more of a benefit than with Save Our Homes. Under the new system, he noted, property tax assessments could increase faster than under Save Our Homes.

Deep cuts

Meanwhile, Miami-Dade officials predicted that the tax rollbacks alone – the part of the plan that needs only a simple majority of the Legislature to pass – would cost $376 million in the first year. The county estimated cuts of $30 million from Jackson Memorial Hospital, $70 million from the fire-rescue district and $19 million from the library district. Broward officials were working on their numbers Monday.

A $70 million cut to the Miami-Dade fire-rescue district would mean “at least 100 firefighters would have to be laid off,” said Al Cruz, vice president of Local 1403 of the International Association of Firefighters. “But, more important, there’d be service reduced – fewer firetrucks and slower response times.”

Educators are chiming in. The Broward schools chairwoman, Beverly Gallagher, predicted layoffs of teacher helpers and library staff. Evelyn Greer, a Miami-Dade School Board member, said legislators had such a “fantasy of a tax cut” that they would hurt education, which ranks at the bottom end in spending compared to other states.

“If it weren’t for Mississippi, West Virginia and sometimes Alabama, we’d be at the bottom,” she said.

And the Florida Education Association, the statewide teachers’ union, is gearing up for a fight.

“This certainly causes a little consternation,” said FEA spokesman Mark Pudlow.

‘The idea of ‘Trust us, we’ll make up the money somewhere else’ reminds us of the Lottery. They said it would enhance education, but it didn’t happen.”

Copyright © 2007 The Miami Herald, Marc Caputo and Mary Ellen Klas. Distributed by McClatchy-Tribune Information Services.