Monday, July 30, 2007

Florida TaxWatch On Property Tax Cuts

Much to my shock, former Jeb Bush economic advisor J. Antonio Villamil wrote a scanting study against property tax reform. Villamil makes it clear that schools are not exempt from budget cuts.


School funding is not exempted from the likely local revenue reductions if the voters approve the proposals, with Tallahassee “promising” to somehow make up the decline in local school revenues.


Villamil states that the new reforms are so confusing that many economist have trouble understanding how they will work. The tax cut creates potential problems for funding esssential services such as police and fire rescue. This lends creedence to the Hank Fishkind report that there aren't huge amounts of fiscal fat in local budgets.

Renters and commercial property owners will feel no benefit from the property tax cuts. That was never the point. Jeb Bush ignored the cries of homeowners before he left office and Crist and the State legislature wanted to quickly appease angry constituents.

Homestead exemption will be tied to the Florida Personal Income Per Capita. The latter is an estimate of the average income per resident in a county or municipalities. The U.S. Bureau of Economic Analysis estimates PIPC at a slow rate and can not completely account for new residents moving into Florida. Villamil's concern is that Florida will not have enough tax revenue to meet growth demands or a Katrina-level disaster.

It's bad when one of Jeb Bush's fomer advisors is against a tax cut.

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