Bad economic news might hold a silver lining for Florida cities and counties reeling from massive property-tax-cut proposals coming from Gov. Charlie Crist and the state House.
The state's Revenue Estimating Conference is expected Monday to shrink anticipated tax dollars for next year's budget by as much as $800 million, blaming a slump in sales tax stemming largely from the slowdown in Florida's housing market.
Just as Crist began his term as governor facing a special session faster than most of his predecessors -- the insurance session opening a mere two weeks after his swearing-in -- he now faces his first economic trouble faster than many previous executives.
The state's budget year is shaping up as the worst since 2003, when Florida was still digging out from the halt in tourism spawned by the terrorist attacks two years earlier.
Four years ago, lawmakers cobbled together a $54 billion state spending plan helped by a little more than $500 million in new money. This year's $71 billion model may be aided by only about $1 billion more than last year -- a level that will demand more belt-tightening than seen lately in fast-growing Florida.
But the real squeeze looks certain to be felt by cities and counties. The House's tax overhaul would remove an average 38 percent of property-tax dollars going to cities and an average 29 percent from counties.
Still, some are hoping that the darkening economic news may cause lawmakers to ease back on the sweep of the tax rewrite. The House would ultimately like the tax proposal to result in the elimination of property taxes on primary residences in exchange for higher sales tax.
"Do we want to put all our eggs in one basket?" said John Wayne Smith, lobbyist for the Florida League of Cities. "There is some legitimacy to having a diverse tax source -- just like there is a legitimacy to having diversity in your portfolio."
Such views are expected to intensify as state budget writers begin putting together a spending plan that is likely to continue forcing local governments to shoulder a big chunk of funding for schools, social programs and criminal justice.
So far, though, lawmakers seem to show little sympathy. Some think harder times may make the case for tax cuts.
"It's really a great philosophical debate," said Rep. Frank Attkisson, R-Kissimmee, a former mayor now sponsoring the House tax-cutting proposal. "Do you want big government to have money to spend to kick-start the economy, or do you want, as I do, that money to go back to Floridians so they can build more houses and get the economy restarted?"
The Ax Man
Doug Guetzloe and Ax the Tax has launched a constitutional-amendment drive aimed at winning voter approval for a 3 percent cap on annual property-tax increases.
Guetzloe, chairman of the Orlando-based anti-tax organization, is the latest to join the battle about property taxes, which is expected to dominate the legislative session that opened last week.
"We strongly believe that with all the discussion of property-tax reform, that the only real way to reform government is to turn off the spigot and cap revenues and therefore expenditures," Guetzloe said.
The proposed ballot initiative would allow the property-tax rate set by cities and counties to rise above 3 percent annually only if voters approved the move.
The idea requires 611,009 voter signatures and approval by the Florida Supreme Court to advance to the ballot.
Higher calling
Just moments before Crist delivered his State of the State speech last week, Senate President Ken Pruitt teased his House counterpart, Speaker Marco Rubio, who many think is a likely candidate for higher office down the road.
With a House chamber full of legislators and luminaries, Pruitt announced that "after much observation" he had decided to endorse Rubio in the 2008 presidential race.
Pruitt then revealed a "Rubio for President '08" sign, drawing plenty of laughter, including from Rubio himself.
"He said he can't afford the pay cut," Pruitt told the crowd.
For more insider information and insights on Florida politics, go to Central Florida Political Pulse at orlandosentinel.com/politicalpulse. John Kennedy can be reached at jkennedy@orlandosentinel.com. Jason Garcia can be reached at jrgarcia@orlandosentinel.com. Both also can be reached at 850-222-5564.
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