Tuesday, June 22, 2010

Bill McCollum On Taxes. Sink's And Chiles' Opinions.

Republican gubernatorial candidate Bill McCollum made the promise last week that if he were to be elected, he would fight for a two-year freeze on property tax rates for local governments.

"Grossly speaking though, we have a problem with over-taxation in our state and in some communities," McCollum said.

I think Bill is a bit late on this assessment. Since the housing bubble burst, property taxes have plummeted - my home alone dropped over $100,000 in the past few years subsequently lowering my tax burden. Florida is also blessed with a thing called Disney World, as well as Universal Studios, Busch Gardens, Sea World, and a slew of other tourist attractions - Floridians don't pay a state income tax and have generally low sales taxes.

I am curious if by "freeze" McCollum means that taxes wont increase or decrease, because considering current trends, keeping taxes the same for two years may actually help local governments. I am sure that taxes will still be allowed to go down, and considering Florida has the Save Our Homes tax credit, once the property value drops, it can only raise incrementally instead of by the full assessed value.

What bothers me even more regarding this whole "over-taxation" view that many governing officials seem to share is that the State was running pretty smoothly before the housing boom, but when the boom was under way, local governments saw a huge increase in tax revenue, as well as added income from impact fees from new construction, which presumably went towards the local infrastructure. That was a load of bull. Local governments bloated their budgets and wasted the money. Now they are upset that they have to return to pre-boom budgets.

On top of that, because of the Save Our Homes tax credit, homesteads receive the credit, meaning the added taxes are on things like investment properties or second homes - particularly properties owned by "snow birds," or residents who live in Florida during the cold months of the north. As Floridians, we should be happy to tax the residents of the other states, because during the rest of the year, Floridians who may rent these properties are essentially sending money out of state.

If you ask me, it sounds as if Alex Sink has a more comprehensive understanding of the situation at hand, "considering $3.25 billion in suggested cuts that are not supposed to affect core services such as courts and schools."
Sink said she found ways to cut spending without harming service in the 12 departments she oversees as CFO and would do the same with the more than 30 agencies directly under the governor's control.
There was something else I found troublesome about McCollum in the article - McCollum wanting to get Florida out of the "property insurance business," referring to Citizens Property Insurance, a "not-for-profit, tax-exempt government corporation whose public purpose is to provide insurance protection to Florida property owners throughout the state."  Citizens Property Insurance is typically regarded as a last resort insurance corporation and considering other traditional property insurance corporations are attempting to leave Florida for good, deregulation is probably not a good idea because it would leave a lot of homeowners hanging out to dry.

The Herald Tribune article also mentioned independent gubernatorial candidate Lawton ``Bud'' Chiles III thoughts, believing that instead of freezing taxes and cutting services, Florida should seek new revenue sources like taxing internet sales (which I disagree with unless from the same state) or reducing tax breaks for corporations (which I completely agree with).

Basically, I believe McCollum is the wrong choice and the election this fall should be between Chiles and Sink - the latter two seem to be more aware of the needs of Floridians while McCollum is just hopelessly pandering.

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