Economic Details Are Essential Before We Vote On Tax Relief
Written by Miami Today on November 8, 2007
For legislators, the beauty of upending Florida’s property tax structure is that they’ll be term-limited out of office before they have to face the inevitable consequences.
Legislators wildly altered their new tax relief plan from day to day, right up to the final hours last week, based only on what deal they could cut among themselves.
The reverberations are still distant, so it’s entirely possible that the plan that goes on the ballot Jan. 29 might actually do what’s intended without irreparably harming the public, business, the Florida economy, or state or local government.
But it’s more likely that a fistful of unintended consequences lurks in the package that could seriously damage any of the interested parties.
One thing is sure: anything that revamps the way we are taxed inevitably will shift the strategies that individuals and businesses follow to maximize tax advantages and minimize taxation’s pain. That applies to those now resident in Florida and those who might, or might not, come here — and in-migration of businesses and individuals has long been central to the state’s economy.
We need careful studies that forecast those inevitable shifts and their resultant impact on government and the economy.
Legislators stumbled toward a package they could pass minus the economic consultation that could pinpoint hidden fundamental consequences. Expedience trumped expertise.
They seemingly faced easy decisions because they aimed to directly cut revenues of local governments, not the state. But any critical study would uncover multiple secondary reverberations at the state level, too.
If voters approve the package, its impact will combine with that of a tax cut the Legislature enacted earlier this year. A constitutional petition drive that House Speaker Marco Rubio threatens in order to force even deeper cuts may further flavor the cocktail.
Complex as that potion might be, factor in efforts of the state Taxation and Budget Reform Commission, which is formed every 20 years and has already met 66 times as it studies overhaul of state financial basics. That commission, too, can propose constitutional amendments.
While the Taxation and Budget Reform Commission has been hearing experts testify statewide and is the ideal forum in which to repackage the state’s taxation mix, the rest of this rush to reform is the result of dealmaking more than broad critical thinking.
The chance that all this willy-nilly tinkering with taxes will hit the target is slim. Just recall the Save Our Homes amendment that tried to help homeowners with property taxes and wound up locking them into their homes forever. Nobody saw that one coming, either.
While almost everyone wants more tax relief than the legislature’s first two bites of the apple promise, the greater concern to Floridians should be a process — or lack thereof — that leaves us open to potential future disasters like the Save Our Homes fiasco.
A tax structure, after all, should aim not to fit agendas of grandstanding politicians or parties or special interests, but to equitably meet the needs of the state and its subdivisions to maximize benefits to all residents. That’s easy to say, hard to achieve — but certainly the wheeling and dealing that we just witnessed will seldom achieve it.
Although the requisite impact study was lacking when the legislature cobbled together a taxation package for public consumption, such an economic review is now vital, even after the fact.
Voters should demand of their legislators before Jan. 29, and of the Taxation and Budget Reform Commission later, that they produce professional studies that pinpoint ripples of their proposed constitutional changes that would wash over the state as a whole, its constituent elements and its residents.
Legislative leaders will be long gone when a leaky financial roof collapses, but the taxpayers will still be here. They deserve more than political promises and platitudes in exchange for their votes.