Senate's tax-cut plan less reaching

By JOE FOLLICK

TALLAHASSEE -- Two drastically different plans to cut property taxes -- one revolutionary and the other more cautious -- will battle for support from lawmakers as they feel the pressure of a historic challenge to the state's future.

On Thursday, after weeks of closed-door planning, Senate Republicans offered their proposal to cut up to $11 billion in taxes over the next five years.

Unlike the more audacious plan offered by House Republicans last month that would offer up to $25 billion in tax cuts over five years, most of the tax savings in the Senate plan would lie in future reductions that would give bigger tax breaks to first-time home buyers and residents who move within the state.

"Every single Floridian saves under this plan, and no new taxes are included," said Sen. Mike Haridopolos, R-Melbourne.

The Senate proposal would roll back county and city taxes to last year's levels and then cap future increases. That would provide about $1 billion in cuts next year for all property taxpayers.

Voters would have to approve future plans to double the homestead exemption for first-time home buyers and allow residents to keep some tax savings if they move within the state.

Details on the Senate plan were scarce Thursday as key players prepared for a more detailed unveiling this morning.

The House plan would roll back county and city taxes to 2000-01 levels, a move counties claim would lead to drastic cuts in services like law enforcement.

The House plan could further cut or eliminate property taxes on homeowners by giving voters the choice of raising the sales tax up to 2.5 percentage points.

Despite staunch opposition from senators to any plan that raises taxes, House Speaker Marco Rubio, R-West Miami, has intensified the defense of his idea, all but challenging the Senate to dig for deeper cuts.

"This is not a place that likes to do dramatic things," Rubio said of the Legislature. "This is a place that specializes in packaging something as reform and then we go home and it really didn't do anything. Maybe you can get away with that on some issues. Not this one."

Rubio has organized a rally at the Capitol next week to support his plan and used Republican Party of Florida money to set up a Web site and conference calls to gather support.

On Tuesday, he met with a group of residents who favor his ideas.

Some had harsh criticism of the Senate effort that would roll back property tax rates in counties and cities only to 2005-06 levels, compared with the 2001-02 levels favored by the House.

"It's crap," Nancy Hamlin said of the plan. The Sarasota resident said her taxes went from $1,200 a year when she moved to the state in 2003 to $3,600 now. "If they roll back the taxes to 2005-2006, who does that help? Nobody."

The Senate plan echoes parts of Gov. Charlie Crist's proposals by allowing residents to keep some tax breaks if they move, but it would increase the annual assessment by up to 10 percent a year on the new home in contrast to the current "Save Our Homes" cap that limits annual increases to 3 percent or the rate of inflation.

Crist supports doubling the homestead exemption to $50,000; the Senate plan would do that for first-time home buyers.

"I do think we will have the governor's support because we've done everything he said he wanted to do," said Sen. Steve Geller, D-Hallandale.

And the Senate plan may have succeeded in winning over counties that have battled the costlier House proposal. Susan Latvala, the president of the Florida Association of Counties, said in a statement, "Based on preliminary review of the Senate plan, we are hopeful that these cuts, while painful, will not be lethal to crucial county services."

Lawmakers have agreed to exempt $25,000 of personal property owned by businesses from the tangible properties tax.

That would effectively eliminate the tax for nearly 1 million smaller businesses and provide a tax cut for 300,000 larger businesses.

But the divide is large over how far lawmakers will force counties to cut their taxes and whether voters could choose to raise the sales tax for even deeper property tax cuts.

Beyond the cultural battle between a younger, more aggressive House and the veteran, more moderate Senate, the idea of bipartisanship is a factor. Rubio's plan is based on conservative trickle-down efforts that favor massive tax cuts in hopes of triggering economic activity.

Democrats have opposed it, saying higher sales taxes would unfairly harm lower-income residents while owners of mansions would end up paying no property taxes.

"You hear a lot of talk about ... you need to get consensus," Rubio said. "On most issues that's the right thing to do but there are some issues where that's not possible because there's a significant ideological difference. I think taxes may be one of them."

In contrast, the Senate plan was designed to get bipartisan support and succeeded as Democrats joined Republicans in praising the effort.

"Our goal was to get 40 votes," said Sen. Dan Webster, R-Orlando, referring to the number of senators. "We're going to march down (to meet with the House) and work it out."

Whether either side will compromise enough to find an agreement before the May 4 end of this year's Legislative session is unclear.

But most lawmakers agree that changes, whether they come now or later this year in a special session, could affect the state's future as residents face an less affordable life due to taxes.

"Florida is counting on us to get this right, and to get it right the first time," said Senate President Ken Pruitt, R-Port St. Lucie.

On that, at least, he seemed to have agreement.

"It's a crisis that needs real reform," Rubio said. "If we don't do it this year and we don't do it right, we're going to pay a real price. This is a defining moment in our economy."