Update on the Florida Taxation and Budget Reform Commission

The following article was provided by Florida TaxWatch, a consumer watchdog group based in Tallahassee.

After hearing from citizens and taking testimony from a number of experts over the last few months, the Florida Taxation and Budget Reform Commission is now getting down to the work of proposed constitutional amendments that the TBRC can take straight to the voters beginning this November.

After a round of meetings on December 14, the Commission took a break for the holidays and will begin voting on proposals in January. Below is a summary of issues under consideration by the TBRC.

Property Taxes: While there has been a lot of discussion on property taxes, the TBRC has been waiting to see what the Legislature did first. Whether or not the January 29 constitutional amendment passes, the Commission will surely consider a number of related proposals, including a possible alternative to the amendment. Commissioner Carlos Lacasa is offering a proposal that he presented at the Florida TaxWatch Annual Meeting. This proposal includes a 5 percent assessment cap for non-homestead property and an exemption for homesteaders worth half their property's value. Other property tax proposals already introduced deal with portability, "highest and best use", and exemptions for renewable energy devices, wind hardening improvements and conservation land.

Streamlined Sales Tax Project:  There appears to be widespread support for a proposal that would make Florida fully compliant with the Streamlined Sales Tax Project, a consortium of states working to make collecting sales taxes on remote sales easier on businesses, and therefore more politically feasible. Florida TaxWatch has long recommended this as a way to collect potentially billions of dollars in taxes currently owed the state and to remove a severe competitive disadvantage facing our in-state retailers.

Sales Tax Exemptions and Exclusions Review:  There is also considerable support on the Commission to at least review sales tax exemptions and services for potential taxation. There is also considerable debate on how to do it. The most high-profile proposal is one by Commissioner John McKay that would repeal most school property taxes and require the Legislature to make up the $9 billion by removing exemptions and/or taxing services. The Legislature would have to decide which things to tax.

Another proposal, similar to past TaxWatch recommendations, would create a process for the Legislature to review and vote on every exemption. The full Legislature would have to vote to repeal an exemption for it to cease to exist. Florida TaxWatch research has been quoted extensively in this process and we will continue to work to ensure that any review be done it a deliberative manner, that economic consequences be considered and that a "sunset" provision is not used to repeal exemptions.

Other issues being considered include a review and re-justification process for special districts, changes to the Bright Future Scholarships and the Prepaid Tuition programs, a TABORlike government revenue limit, transportation funding sources and state water policy.

Florida Lawmakers Face $2.4B Budget Shortfall - A few days before Christmas, fiscal analysts with the Florida Legislature warned lawmakers that the state is facing a $2.4 billion budget shortfall so there will be little or no funding for local projects. The Legislature cut $1.1 billion in a special session last year and the regular session, starting in March, will have $1 billion less to work with for the year starting on July 1. The stage is set for a challenging 2008 session. When you add the drama of an election year to the equation, anything can happen.

Governor Announces New Discount Drug Card Program -- Under the state's new Discount Drug Card program, 3,000 pharmacies in Florida will provide pharmaceuticals at a discounted price for more than 3.8 million uninsured seniors without prescription drug coverage and for people under the age of 60 who are low-income, but do not qualify for Medicaid and lack drug coverage.

While savings will vary by drug, savings on the most commonly prescribed medicines will range from five to 42 percent, Governor Christ said. Both brand-name and generic drugs are in the program.

Floridians who plan to use the new drug card need to check to see if their pharmacy is participating. A check of the program's Web site shows most of the state's big retail pharmacy and grocery chains are participating, including CVS, Walgreens, Wal-Mart, Kmart, Target, Publix, Sweetbay, Winn-Dixie and Albertsons. The Web site also lists what drugs are covered.

The drug card plan requirements include:

• Eligibility requirements. Under the plan, individuals qualify if they are 60 or older and have no prescription drug coverage, or if they are in the Medicare drug coverage gap. People under 60 may qualify if their annual income is less than 300 percent of the Federal Poverty Level and they lack prescription drug coverage. 
• Qualifying income levels for people under 60 are: up to $30,636 a year for an individual; $41,076 a year for a family of two; and $61,956 for a family of four.

The new card plan will be administered by Envision Pharmaceutical Services, a pharmacy benefits manager based in Ohio. Envision manages a similar program for the state of Ohio.  Program members will pay a one-time upfront charge of $1.50 for the cost of the plastic card which they will receive when enrolled into the program.

Digital Convertor Coupon Program Begins on January 1, 2008 - Over 22 million $40 coupons are now available to help television owners buy special converter boxes for older TVs that might not work after the switch from analog to digital broadcasting (DTV).  The converter boxes are expected to cost between $50 and $70 and will be available at most electronic retail stores.  Consumers can apply for their coupons through a Web site, via a toll-free number, or by mail. Specifics are listed below:

• Households will be able to apply for a maximum of two (2) coupons, each worth $40. Coupons will be mailed to eligible households and will expire after 90 days of issuance.
• Coupons will be available on a first-come-first-serve basis to all U.S. households until $890 million has been expended.
• If these initial funds are exhausted, an additional $450 million will be made available to households that receive only over-the-air television service.
• Consumers may call toll free 1-888-DTV-2009 (1-888-388-2009) in English and Spanish for updates.
• The hearing impaired may call the TTY number 1-877-530-2634 for information in English, and for information in Spanish, consumers can call TTY number 1-866-495-1161 for updates.
• Coupon Program details, Frequently Asked Questions and program brochure are online: http://www.ntia.doc.gov/dtvcoupon/consumer.html

Under legislation passed by Congress - the Deficit Reduction Act of 2005 - over-the-air broadcast television stations are required to turn off their analog channels on February 17, 2009, and broadcast exclusively in the digital format.

New Law Requires Better Energy Efficiency -- Congress sent an energy bill to the White House that will increase the federal auto mileage requirement and require an increase in the use of ethanol as a substitute for gasoline.  The House passed the bill 314-100, after the Senate approved it last week 86-8. Bush signed the measure Wednesday morning at the Energy Department.