Florida High Court Ruling Divides Taxpayer, Business Groups

Published December 1, 2008

The Florida Supreme Court has decided not to allow the state’s voters to decide whether to cut property taxes 25 percent and increase the sales tax and other taxes. It removed from Florida’s November general election ballots a proposed referendum that would have made those changes.

The justices ruled the language of the proposal, called Amendment 5, was too ambiguous for voters to decide. The amendment guaranteed school funding only for the first year and made no mention of where the lost revenue would come from after that. Backers were proposing a one cent sales tax increase and an increase in taxes from undefined sources.

Amendment 5 and the court’s September ruling deeply divided advocacy and business groups. Many opposed the amendment because it would have increased taxes while cutting school funding.

‘Trojan Horse’

Dominic Calabro, president of Florida TaxWatch, praised the court’s decision, saying the amendment did not adequately inform voters of the changes to the state constitution.

“Amendment 5 was a fiscal Trojan Horse that would not have provided any assurance that education funding would have been ‘held harmless’ past 2010-2011,” Calabro said. He added Florida TaxWatch would work with lawmakers for “meaningful tax and spending reforms.”

Florida Chamber of Commerce President Mark Wilson also opposed Amendment 5, and he urged legislators to take up the issue of property tax reform.

“We look forward to continuing the fight along with Gov. [Charlie] Crist [R] and the legislature to finish the work on property tax relief,” Wilson said.

The Associated Industries of Florida likewise opposed the amendment. “Thankfully, we now have until 2010 to find the correct answer to this beguiling issue and, if recent history is any indicator, we will need all of that time to fashion an equitable and fair fix,” said the organization’s president, Barney Bishop.

‘Relief for Everyone’

Some business groups, such as the Florida Association of Realtors, favored Amendment 5.

“It’s kind of an across-the-board tax relief for everyone,” the group’s president, Chuck Bonfiglio, said before the court’s ruling. “We see it as one of the most far-reaching tax reform initiatives this state has ever seen.”

The court’s ruling has angered some taxpayer advocate groups that believe the legislature has been complacent in reforming the state’s property tax system. They remain undeterred by the ruling, and some have vowed to press on with gathering signatures for a similar amendment for the 2010 ballot.

Grassroots organizations including the Manatee County Coalition Against Runaway Taxation are meeting to plan their next moves. The group says it will continue to apply pressure to Crist and legislators to reform a property tax system that unfairly burdens business owners and part-time residents.

Floridians for Property Tax Reform announced after the ruling it will press forward with a proposed property tax cap amendment for 2010.

“The court has taken further property tax relief out of our hands for now, but not for good,” said Jose Cancela on behalf of the group.

Nick Baker ([email protected]) writes from Chicago.