Crist's Tax Reform Package

Governor Crist released his plans for property tax reform in Florida today. Citing skyrocketing tax collections by local governments and out of control spending, Governor Crist called for a special election this summer that would let voters decide on four major reforms:

-Allow local governments to increase homestead exemption from $25,000 to $50,000 (adjusted for inflation).
-Allow the Save our Homes Cap to be transportable when people move (unclear if entire tax cap will be transportable).
-Cap property tax increases for business to 3% or inflation, whichever is less.
-Exempt smallbusiness from tangible property tax on first $25,000 of business property and exempt some property such as computers from tax.

(See Governor’s press release at http://www.flgov.com/release/8567.)

These measures will require that both chambers approve a special election by 3/4 vote and then 3/5 must approve the ballot language in each house. Final passage will require 60% approval by the voters to amend the state constitution.

Cut Taxes Now applauds the Governor for recognizing this serious problem that affects the hard working, tax paying citizens of Florida. Our Board is analyzing the impact of these proposed changes to see if they are strong enough to provide substantial and immediate tax relief.

Several areas of concern need to be addressed:
- First Time home buyers will still face unlimited tax growth
- Local governments will likely ask the state government for more tax money.
- State level taxes can still increase as more groups ask for more state money.
- Special interests will redirect their budgetary requests to the state if local money decreases somewhat.
- Local governments can still impose other taxes.
- Startup businesses and businesses relocating from out of state will not have a cap.
- Business will not have a transportable cap when they grow and try to move.
- Local governments likely will still seek to spend money beyond inflation and population growth increases.

The effectiveness of these tax reforms –assuming they are passed - will be seen as budgets from local government are turned in at the end of the year. Will they still demonstrate double digit increases in spending or will the reforms restrain the growth?

Governor Crist may want to give the voters a true choice by also placing a Taxpayer Bill of Rights on the ballot that will limit ALL tax AND spending increases to the lower of 3% or inflation unless a larger increase is approved by voters in later special elections. That will solve all of the potential problems cited above.

To Ask the Governor to allow voters to choose a TABOR, go to: http://www.freedomworks.org/newsroom/press_template.php?press_id=2012

We look forward to seeing the detailed ballot language that comes from the state legislature and will continue to work for meaningful tax relief.