To the Bone - Gov. Charlie Crist’s Property Tax Cuts Are Too Deep For State Budget

To the Bone - Gov. Charlie Crist’s Property Tax Cuts Are Too Deep For State Budget

When Charlie Crist ran for the governorship of Florida in 2006, one of his main pledges as a candidate was to reduce property taxes in the state. After winning, he did exactly that; after pushing half his promised cuts through the legislature last year, Amendment 1 was phase two in Crist’s tax-cut plan. The timing was perfect for homeowners, who got a little relief in the midst of the current economic downturn, but it may prove disastrous for cities and counties that must now make deep cuts for the second straight year.

With Crist being feted and vetted as a potential running-mate for John McCain, the impact of Amendment 1 may undermine his national appeal. Crist, a moderate in the mold of his predecessor Jeb Bush, endorsed McCain, while many of his peers did not. McCain won the state by five points, taking 20 of its 25 congressional districts against Rudy Giuliani, who had personal and business ties to Florida going back a decade, and Mitt Romney, who spent $30 million there. His victory reinforced Crist’s elected status as the new political boss of Florida—and at just the right time.

Under the shadow of the presidential primary, Amendment 1 not only passed but passed overwhelmingly, 64%-36%. Only 14 of Florida’s 67 counties voted against it: Duval Gadsden, Hamilton, Hardee, Jackson, Jefferson, LaFayette, Leon, Liberty, Madison, Putnam, Suwannee, Taylor and Wakulla. Collectively, these counties account for less than 10% of the state’s population. Duval (pop. 897,597) and Leon (pop. 272,896), the state’s fifth and 20th largest counties, were the only ones with populations above five figures to vote against Amendment 1. On average, the savings presumably work out to about $240 per homeowner, but services lost have already canceled that out.

Florida is one of two dozen states currently facing shortfalls in their FY2008-09 budgets, with at least $3 billion projected at the moment. That is roughly 10% of its General Fund, notwithstanding pensions and emergency funds. With the recent upswing in violent crime still raw in the hearts of many voters, cities are trying hard not to cut into their police and fire departments, which show signs of falling behind the criminal trend. One method that had some success last year was to offer early retirement at full benefits to city and state employees, but given the precarious nature of the state’s finances, it is unclear if they can afford to make such deals this time around. (There is a lingering taint of scandal around the state pension plan, among other things.)

Florida’s school districts appear poised to absorb most of the shortfalls, which effectively means a halt to whatever progress was being made in student achievement. Most of the coming cuts there will be concentrated among familiar scapegoats: the arts, music and physical education. Duval is looking to eliminate its highly successful but chronically underappreciated Academic Challenge program (aka “Brain Brawl”) to save $50,000; this amounts to punishing children for their success. Lee County, whose population has grown 40% in this decade, cut $20 million from its 2006-07 school budget and is facing another $30 million cut for 2008-09.

It remains to be seen how well, or how poorly, municipalities adjust to their new reality, and what the long-term effects on Florida will be. But even now, with shortfalls looking to be the major story out of Florida this year, state lawmakers are not only unrepentant, but they persist with the same attitudes that brought them to this point. Crist has come out against the dollar-per-pack increase in the cigarette tax, and the legislature is currently considering legislation that would cuts property taxes still further.

Tags: taxesbudgetsflorida

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