After months of offering only lukewarm support (or in some cases, even "accidental" opposition) for a November ballot proposal that seeks to eliminate a substantial portion of school property taxes, Florida Governor Charlie Crist finally said this week that he would actively work to help secure the measure's passage. This announcement comes just days before state economists' are set to issue their revised projection of the state's looming budget deficit which one economist has already warned, "is going to be big". Unfortunately, unprecedented budget cuts have already been made in education, social services, and most other government functions, leaving Florida with few reasonable options for filling this additional gap. With revenues in such sad shape, there's even less reason now for Florida to move towards becoming more reliant on unpredictable sales taxes -- which this ballot measure proposes to do.
Previous Digest articles have already detailed the flaws with the plan Governor Crist now supports. (See Florida: Tax Swap or Tax Flop?; Florida: Good Thing We Don't Have To Do This Again For Twenty Years; and Florida Tax Commission Charges Ahead With Unfair and Fiscally Irresponsible Plan.) In short, it's regressive, inadequate, unsustainable, and does nothing to fix the "brokenness" of Florida's property tax system.
An article that ran in the Sun Sentinel this week provides some additional evidence on these points. One state economist has said that "the amendment's language isn't clear in some areas and creates uncertainty and multiple options." This, the Sentinel notes, means that "because economists don't know what offsetting tax increases will be imposed... there's no real way to gauge the economic impact of the property-tax cuts. In other words, nobody's certain who'd pay less taxes and who'd pay more."
Nonetheless, Governor Crist is now touting the measure as a "significant stimulant to Florida's economy". While the degree of disconnect here between rhetoric and reality is unsettling, it unfortunately has become the norm for any Florida tax debate. As things stand right now, voters appear about evenly split over the measure, though a sizeable 20% of those polled in a recent survey were undecided on the issue. Hopefully, Governor Crist's endorsement of the measure won't alter these numbers too significantly.
Check out the Florida Center for Fiscal and Economic Policy's website for more information as the November election approaches.