CONSTITUTIONAL AMENDMENT
Broadcasters battle tax-swap plan
The tax-swap fight heats up as broadcasters plan to weigh in against it, claiming it takes from average homeowners to give to corporate property owners.
Posted on Sun, May. 18, 2008
BY MARY ELLEN KLAS
TALLAHASSEE --
Put aside the Clinton vs. Obama and McCain fights for a moment and consider a summer of political ads accusing black-hat corporate interests of getting million-dollar tax breaks at the expense of hard-working Floridians if they approve an amendment to the state constitution.
''Robin Hood in reverse'' is the image the Florida Association of Broadcasters wants viewers to have when the group donates hours of television ads and airtime between now and November to kill Amendment 5 -- which asks voters to approve a 25 percent property-tax cut in exchange for higher sales taxes and closing tax loopholes. The ads will focus on the fact that the tax swap would allow out-of-state corporations with properties in Florida to reap big savings when the tax bill drops for everyone.
The industry's goal: to create enough confusion and distrust about the amendment, placed on the ballot by the state Taxation and Budget Reform Commission, that it falls short of the 60 percent threshold needed in November to become law.
''We plan to make sure every voter, and every citizen knows what greedy corporate commission members tried to do and, when it's over, I hope they're all embarrassed,'' said Pat Roberts, executive director of the broadcast trade association.
The amendment was placed on the ballot by the powerful citizens panel charged by the Constitution with reviewing the state's tax and budget system. It repeals the portion of property taxes that pays for schools and requires the Legislature, in 2011, to replace the lost revenue with either additional sales taxes, elimination of tax breaks and loopholes, or budget cuts.
Roberts has formed a political committee and plans to raise $5 million through the backing of nearly every major business association in Tallahassee, education groups and the Republican presiding officers of the House and Senate in 2010 -- Sen. Mike Haridopolos and Rep. Dean Cannon.
They say the tax swap would force businesses to shoulder a larger share of the tax burden, give tax breaks to out-of-state corporations, force education to depend on a more volatile tax base, and reduce the federal tax write-off property owners now get on their income taxes.
But the proponents, led by amendment sponsor John McKay, a former Senate president and tax commission member, plan to mount their own campaign to educate voters and push the amendment. They argue that 20 percent of all sales taxes are paid by tourists, that property taxes are less stable than sales taxes in the future, and that the property tax cut will revive Florida's economy, spurring consumption and lowering the tax burden for all.
`ALL ABOUT MONEY'
''This is all about money and [Pat Roberts] is concerned that his members might be losing whatever [sales tax] exemptions his members enjoy,'' McKay said. ``There's no doubt we'll raise the money to run a campaign, and a very effective campaign.''
McKay is also forming a political committee and he expects heavy financing from Realtors and developers -- the business sectors that are counting on the tax amendment to thaw the state's frozen real estate market and revive their industries.
The Realtors will pony up at least as much as they spent to support tax-reduction Amendment 1 that passed on Jan. 29 and will decide in the coming weeks how much more to contribute, said John Sebree, executive director of the Florida Realtors Association.
REALTORS' SUPPORT
''Based on the level of property tax relief that this amendment provides, $1 million would be the minimum since that's what we put into Amendment 1,'' he said. Amendment 5 ''is five times the property tax relief of Amendment 1'' he added, saying that a preliminary survey of his 600-member board shows they ''overwhelmingly'' support it.
McKay and Roberts have faced off before. In 2002, McKay failed to get the Legislature to put an amendment on the ballot to force it to review and justify the $25 billion in sales tax exemptions. In 2004, when he mounted a petition drive to put it before voters, Roberts helped finance the legal challenge to keep the measure off the ballot and financed attack ads against senators who voted for the measure in 2002.
''He'll argue it's those corporate, evil interests who are backing this,'' McKay said. ``And it's the same corporate evil interests he gets money from. He did exactly the same thing against individual members of the Senate -- which was despicable.''
While education groups were the largest contributors of the nearly $1 million McKay raised for his initiative in 2004, they are not backing his effort this time. Their principal reason: They don't trust legislators to replace the money lost to schools in the amendment.
''It really causes us concern because raising revenue is anathema to a lot of the folks that are in the legislative leadership now,'' said Mark Pudlow, spokesman for the Florida Education Association, the state teachers' union.
''All indications are it will be a lousy budget year next year and if you're going to throw the tax system into further chaos, I don't know how we'll get out of it,'' Pudlow said.
McKay is hoping he can quell the concerns of the education groups before they join the assault. ''It's a long time between now and November,'' he said.
Roberts, along with the broadcasters and the newspaper industry, are often credited with killing the services tax in 1987, when legislators tried to broaden the sales-tax base by imposing taxes on services -- such as advertising.
ABOUT COMPARISONS
McKay says any comparison with the tax swap and the services tax is ill-informed. The Legislature this time will need to consider eliminating only a fraction of the exemptions they erased then, he said and, ``it's extremely naive to think that, after the '87 services tax, the Legislature would ever consider instituting a sales tax on advertising.''
Haridopolos, a Republican from Melbourne who is slated to become Senate president in 2010, has been the most outspoken critic of the amendment.
Speaking to business audiences recently, Haridopolos said that the tax swap would force the Legislature to ''impose the largest tax increase in Florida history'' and lead to the elimination of tax exemptions on automobile trade-ins, water and utility bills and ``everything government buys.''
`ACE IN THE HOLE'
For opponents of Amendment 5, more strapped for cash now than in most years, the willingness of broadcasters to donate expensive air time may be their ''ace in the hole,'' said Barney Bishop, executive director of Associated Industries of Florida.
''This is a tough political environment. People are hurting, the economy is down, costs are tremendously tough and there is not a lot of money to be doing much politically,'' he said.
''The ace we have is with broadcasters -- and that could make the winning difference,'' Bishop said.
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