Republicans favor elimination of property tax in favor of 3 cent sales tax

[Herman Munster]

http://www.orlandosentinel.com/news/local/state/orl-taxes2007feb20,0,1922504.story?coll=orl-news-headlines-state

TALLAHASSEE -- Republican leaders in the Florida House are floating a radical tax overhaul that would eliminate property taxes paid by homeowners in favor of a 3-cent increase to the state sales tax.

The tax-swap would be paired with stiff spending or revenue caps on cities and counties intended to limit the amount of property taxes they could collect from all other property owners, including owners of businesses, rental property and second homes.

"It's been kicked around," said Senate Majority Leader Daniel Webster, R-Winter Garden, who was briefed of the concept Monday. "The idea is very interesting to me."

House Republicans, who on Monday began a two-day property-tax conference, say they are still considering an array of possible property-tax changes. But they also say momentum is building for a plan that involves trading lower property taxes for higher sales taxes.

House Speaker Marco Rubio has assigned Donna Arduin, the former budget director under former Gov. Jeb Bush whom Rubio put on a $10,000-a-month consulting contract, to analyze the concept. Measures that have been considered range from replacing school property taxes with a several-cent sales-tax hike to scrapping all property levies and more than doubling the state's 6 percent sales-tax rate, to 13.5 percent.

Rep. Dennis Baxley, R-Ocala, said many lawmakers have warmed in particular to the idea of getting rid of property taxes for so-called "homestead properties," which are houses and condominiums that are their owners' primary residences.

"I definitely think it's on the table," Baxley said.

[ripmolly]

1. I don't know how I feel about this

I just don't know.

Property taxes are going crazy and sales taxes are a good way to get tourists to pay more. I like the gas and hotel taxes we have now. Sales taxes hurt the poor the most though.

[Synnical]

2. It's a regressive tax, hurts the poor

Bad, bad idea.

Sales tax hits state's poor where it hurts -- the wallet
http://seattlepi.nwsource.com/local/211074_workingtaxes09.html

They're trying it in PA, too
Legislators not keen on sales tax bump
http://www.zwire.com/site/news.cfm?newsid=17863231&BRD=1306&PAG=461&dept_id=187827&rfi=6

An informal poll of several area legislators this week showed little support for the tax increase.
"Coming out of the gate, it's not something I would vote for willingly," said Rep. Kate Harper, R-61.
"I think sales taxes are regressive, they burden poorer people more ... they spend a greater percentage of their income on things they have to buy," Harper said. "It's not good for the average working person," who would see "a modest, if any cut, in property taxes, yet their sales tax goes up. I'm deeply skeptical," she said.

[seasat]

3. I agree, Florida has the second most regressive tax system.

Sales tax hammers the poor. Why not do what's been proposed for years and expand the sales tax coverage to certain services? Wait that's right, we're a state run by Republicans and anything that would make tax coverage more progressive should be avoided.

The best solution is simple but politically hard for Repugs. We need either an expanded sales tax base and/or an income tax on higher incomes. Remove the hundreds of sales tax exemptions passed under Jebbie and tax some services. Leave food and medicine exempt. Send more money to the counties to cover education from the higher state revenue.

To cure the property tax mess, repeal the save-our-homes provision. It overwhelmingly favors higher income folks in beach front McMansions. Increase the homestead exemption to a reasonable rate and index it to either inflation or median residential property value. Change the appraisal method to reflect the current usage of the property not the most intensive usage of the property. Small businesses are being skewered because they are estimating the property tax based on if their small beach front restaurant was a 20 story condominium since they consider that the best use of the property.

This is a workable plan that there is no way that the major contributors to the Repug party will let pass in our state. Instead we're going to end up with a bandaid plan that'll eventually make the problem worse.

[Synnical]

13. Excellent points, seasat

Not only do you point out the obvious, you point out solutions. Thanks for your post. :pals:

-Cindy in Fort Lauderdale

[seasat]

15. Thanks for the kind words Cindy

The other option is a state income tax with a high exemption so it only affects the wealthy. However, I think we'll see manatees fly before the Repug dominated state government allows a personal income tax.

[Nimrod2005]

4. I like the idea of no property taxes, some lower income folks can buy a home...

Tourists and other visitors would be pitching in too...

[bluedog]

5. I like the idea also

Homeowners are paying for the services that everyone uses, whether it be for the fire department to respond to an accident, school funds, Transit Authority, Juvenile Welfare, etc.

If homeowners can't afford their taxes and move out of state, thereto goes your tax base. Let all the consumers share the bills for the services we all use.

[Nimrod2005]

6. I am glad you do, as a fellow DU'er...

Property taxes are just overhelming me...Been really hard the past 2 years.

[bluedog]

7. me also.Pinellas County here......

seems like every damn thing has risen....taxes.garbage...phone.....water.. electric.cable............and the biggest hit I got was had to get Citizens homeowners.............I'm getting nailed left and right.........

[Nimrod2005]

8. BTW, I have Citizens, I am lead to believe we will get a refund check?

I already paid for the year, I don't escrow. I am in Broward. Have you heard about a refund?

[Synnical]

12. Are you kidding me?

I would finally be able to buy a home if I pay more in sales tax? That's nuts. I make a good salary, but I'm a one income household. How many more tax cuts to the rich do the Repukes intend to make?

[nosillies]

9. I'm spending less since my mortgage payment went up, so my sales taxes are lower

My mortgage payment is up $500 a month thanks to property taxes. That's $500 that will no longer go to my local businesses. And I know I'm not the only one spending less in my area because of high taxes. And those business owners are also getting screwed by property taxes. So which is worse?

I'm all for it. Leave off the tax increase for necessities, possibly. Get me out from under these ridiculous property taxes and let me control my tax-paying as I see fit. That tiny sales tax increase will be a negligible amount of my every day spending, and if I ever need a big ticket item, I can get it elsewhere.

[RockaFowler]

10. I agree with you

We just bought our first home and I am dreading that Property Tax bill at the end of the year. This would be a welcome relief. Plus I would be the one deciding where my taxes go.

[bluedog]

11. Citizens Refund Checks.......take Note

Citizens refund checks are coming
By ASSOCIATED PRESS
Published February 14, 2007


--------------------------------------------------------------------------------


Citizens Property Insurance policyholders who are wondering about refunds can take heart - the checks are coming. Starting Tuesday, the state-run insurer of last resort began mailing refund checks to those whose policies were renewed in January of this year. The refunds cover a 21 percent rate hike that was eliminated by lawmakers during last month's special legislative session. The company, which has about 1.4-million policyholders, will issue a second round of refunds in March, with new, lower, rates put in place by April.

http://www.sptimes.com/2007/02/14/State/Citizens_refund_check.shtml



****************************also...............note counties*****************

............. refund checks mailed out

Some homeowners are receiving the refunds after legislators mandated insurance rate changes.



Posted February 13, 2007


Refund checks will be in the mail starting today for some customers of Citizens Property Insurance Corp., Florida's largest home-insurance company.

If you're a customer with a single-family home who already paid for the rate increase that took effect Jan.1, you'll get money back soon.

How much you'll get depends on where you live, but refunds will be higher for homeowners in Citizens' high-risk area, which includes parts of Brevard and Volusia counties, mostly along the coast.

Customers in the high-risk area will see their premiums go down by an average of 20.2 percent in Volusia County and by an average of 24.9 percent in Brevard County, according to a rate adjustment filing Citizens made Friday with the state Office of Insurance Regulation.

Those living outside the high-risk area will see much smaller decreases -- an average of 0.1 percent elsewhere in Volusia, and an average of 5.6 percent in Brevard.

Other Central Florida counties won't be affected.

This is the first of a series of rate changes for Citizens, mandated by the Legislature during last month's special session on property insurance.

While refunds for Citizens' coastal customers start today, customers outside the high-risk area won't start getting money back until March 15, according to Citizens' filing.

Citizens' condominium customers won't see any money back yet, because their rates weren't scheduled for a price increase in January, said Susanne Murphy, Citizens executive vice president.

http://www.orlandosentinel.com/classified/realestate/orl-citizens1307feb13,0,7158637.story?coll=orl-realestate-headlines

[seasat]

14. Folks really need to review this proposal.

It doesn't eliminate all property taxes. It only eliminates the property taxes for those that have a homestead exemption. The state sales tax will go from 6% to 8.5%. In cities where they charge the extra penny for local projects it'll be 9.5%. There is also a recent clause in a Florida law that allows raises in the sales tax to cover hurricane damages. We could pay over 10% in sales taxes if this occurs.

The problem with property taxes is that the State government, under Jebbie, has used them to fund the hundreds of sales tax exemptions, repeal of the intangibles tax, and other taxes for the wealthy. They did this by shifting the burden for funding of education from the state to local governments (LINK). The local governments can't lower the millage rates because the state funding formula has increased their required share.

If this ridiculous proposal is made law what will happen is that the burden of taxation will be shifted on to the poorest. Sale taxes are among the most regressive since the poor spend a greater portion of their income on items that are subject to sale tax . It'll also mean that local governments will rely more property taxes from non-homesteaded properties. Small businesses and rental units will be the most affected. In other words, the working poor will get a double whammy of increased rents and higher prices on consumer goods. The middle class will receive a little reduction in overall taxes. The upper 20% will receive a huge tax break.

Sales taxes fluctuate with the economy. This proposal will shift taxes from a predictable income source to a more volatile one. During recessions, our schools (already poorly funded) will have severe cuts forced on them. With the highest sales tax rate in the country, there will be plenty of incentive for avoidance. There will be more black market sales and more internet sales. More people will put off large ticket purchases until sale tax holidays. This proposal will result in lower revenues for already critically under funded state programs. The old economist's cliche is appropriate; there's no such thing as a free lunch.

Florida has the second most regressive tax system in the country. The poor and middle class are being forced out of our state due to rising costs. We do not need a tax shift that makes our system even more regressive.