Fresen pitches school construction tax swap

Feb 3, 2012

The shortfall within the trust fund that supports public school construction projects is so great, that Governor Rick Scott has called on school districts, colleges and universities to give back unspent money from previous years. But as Lynn Hatter reports, there’s a plan afoot in the Florida legislature that could help shore up the fund, and create a dedicated funding source for future building plans.

Florida’s cash-strapped school districts may soon be able to raise money for construction and maintenance projects that have been delayed in recent years due to budget cuts.  A proposal to allow school boards to raise a half-cent sales tax in exchange for a reduction in property taxes is working its way through the house. And district officials like Dr. Wayne Blanton with the Florida School Board Association say, they like the idea. Blanton calls it an improvement over the way taxes for schools are sorted out now.

 “At the current time, a school board can opt to put a half-mill, half-cent or a penny on the ballot and that can be passed by local constituents. And we have 18 districts that have done that. What this would do is allow local school boards to pass a tax and reduce property taxes by an equivalent amount.” 

Under the bill, carried in the House by Republican Representative Erik Fresen of Miami, school boards would have to put the tax swap proposal before voters. And if a majority of them approved it would go into effect—giving a boost of course, to property owners, who would see their taxes decrease.

 “You would get property tax relieve in lieu of a property tax, while providing for the school districts a more steady, more predictable form or revenue for the capital purposes that they need.”   

Fresen’s tax swap idea addresses a problem school districts have had to deal with in recent years—aging infrastructure and the inability to fix it.  Property values have also been falling, steering less money to schools. And the fund that supports building and maintenance projects, called Public Education Capital Outlay or PECO— is broke. Governor Rick Scott recently wrote a letter to school districts, colleges and universities requesting the return of up to $250 million in unspent PECO money from previous years.

Not only do school boards seem to like the idea, the superintendents do too. Bill Husfelt who heads the Bay County School District, says the tax swap idea would work in his county—which gets lots of tourists who would turn in to potential revenue generators.

“It would also share the burden more broadly with citizens and tourism. Especially in the area where I’m from where the tourist industry is a big part of what we’re about.”  

And the idea of giving local counties a say in what happens to their taxes by sending the proposal to a referendum is something that Senator Bill Montford, a Tallahassee Democrat, says he can get behind as well…he just wants to make sure the funding stays equal.

“We have to be careful though because some of our districts have very little business because their people shop in an adjoining county, that their sales tax revenue may not offset the decline in property tax revenue. So we have to be really careful.” 

Montford says if the bill passes, not every district would choose the tax swap option—especially those that are more property-tax heavy. Fresen says his bill was originally for Miami, which is also a major tourist spot. But after hearing from superintendents, he decided to expand the bill to cover other counties. The proposal also comes at a time when many members of the Republican-dominated legislature tend to shy away from anything that looks like a tax increase—and some of them, like Representative Bill Hager of Boca Raton have to be sold on the idea of a tax swap.

 “I’m not going to vote for a tax increase so talk to me about parity in those two numbers.” 

Fresen’s explanation of the tax swap failed to win over Representative Hager who was one of two “no” votes in the bills first committee. Still, it did clear with the rest of the 12 members voting for it. A similar proposal by Senator Gwen Margolis, a Miami Democrat, has yet to have a hearing in that chamber. But observers say they hope to see the bill gain traction in during the remaining weeks of the legislative session.