Miami-Dade

Lower Taxes or Smarter Children?

A property tax amendment slated for a November vote would reduce taxes, at the expense of public schools.

Gov. Charlie Crist

By Jordan Melnick    

For the second time this year, Floridians will have a chance to significantly lower their property taxes — at the expense of public education.

Lauded by Gov. Charlie Crist as the biggest tax reform Florida has seen, an amendment headed for the November ballot would cut property taxes an average 25 percent by eliminating the portion that goes to schools, called the Required Local Effort. In Miami-Dade, where the RLE is relatively high, cuts would reach as much as 33 percent.

To make up for the estimated $9.3 billion in lost revenue to schools, the amendment proposes raising the state sales tax by no more than a penny, eliminating some sales tax exemptions and cutting the state budget.

"This really threatens the base of school funding," said John Schuster, spokesman for the Miami-Dade school district. "Sales tax can be an extremely variable base. It can be affected by hurricanes, thunderstorms, the ups and downs of tourism, recession."

Since the sales tax hike would only raise about $4 billion, the amendment requires lawmakers to figure out a way to come up with the rest by the 2010-11 school year, when the amendment would take effect.

The question is how.

"The most logical way to close the revenue gap is to broaden the sales tax base," said Dr. Shirley Dennis, associate professor of accounting at the University of Miami. "This means the Legislature will be forced to consider eliminating many of the exemptions that for years it has refused to do."

Such currently exempted services include accounting, dry cleaning, beauty salons, charter fishing boats and limousine rental, all of which favor the wealthy, according to John McKay, the amendment's sponsor and former president of the Florida Senate.

The business community is up in arms about the prospect.

"We haven't provided property tax relief," said David Daniel, vice president of governmental affairs for the Florida Chamber of Commerce. "We've just switched over who's going to pay for it."

The Florida Chamber, Associated Industries of Florida and Florida Retail Federation all lobbied against the amendment, which the Taxation and Budget Reform Commission passed 21-4.

The amendment comes at time when Florida's public school system is already reeling. Miami-Dade alone has suffered an estimated $41 million in budget cuts this school year and is expecting a $200-million cut in ’08-’09.

Schuster worries about the impact of all the lost revenue on students.

"This could have a deep impact on students," he said. "Voters will have to look very, very carefully to make sure the education of their children is not threatened."

But the prospect of substantial property-tax relief may prove too enticing to resist. In January, Floridians voted 64 percent in favor of Amendment 1, another effort to lower property taxes. The approval came in spite of state economists’ prediction that public school funding would be cut by $1.5 billion over the next five years if Amendment 1 passed.

"People don't realize education is a business investment," Schuster said. "It's not just an investment in yourself, it's an investment in your community."

As expected, the amendment does not have the support of many teachers.

"We don't need to be losing, we need to be gaining," said June Johnson, the United Teachers of Dade steward at W.J. Bryan Elementary. "We're barely maintaining as is."

Though the amendment requires the Legislature to come up with the $9.3 billion, Johnson, like Schuster, considers the sales tax too unstable.

"Citizens are leaving and tourists aren't coming, so how are we going to rely on sales tax?" she said, gainsaying the notion that the tax shift would alleviate Floridians’ burden by applying tourism revenue to education.

She also worries that teachers will be the ones to suffer if the money is not found.

"Next thing you know, we'll be losing more benefits," she said, a reference to the UTD's ongoing battle with the district to maintain full health care coverage for teachers.

But the teachers are not of one mind. Johnson said she'd spoken to a co-worker who was planning to vote for the amendment. In the end, she said, "You're thinking about the kids, but you're thinking about your home, too."  

The amendment will be on the Nov. 4 presidential ballot. It needs 60 percent voter approval to pass.