State lawmakers will need to decide whether to hold property taxes flat or have the option of providing a significant funding increase to public schools, the chairman of the Senate budget-writing committee said Thursday.
The remarks added new urgency to an emerging debate over what to do about a decision by the Legislature early this year to ensure property owners’ taxes didn’t go up in the current budget year just because property values rose.
Continuing that policy next year could cost the state more than $400 million, according to state economists.
“I think it’s clear to me that if we don’t capture the new property values, there will be very slim if any increases for K-12,” said Senate Appropriations Chairman Jack Latvala, R-Clearwater. “So if we want to provide any local school district increases, I think we’re going to have to allow them to take the additional property value.”
Latvala made the remarks after his committee held a hearing on the state’s budget forecast and the challenges it could face.
His comments on education funding could prove controversial among Republicans who hold commanding majorities on both sides of the Capitol.
House Speaker Richard Corcoran, R-Land O’ Lakes, seemed to indicate to reporters at a press conference last month that he would like to continue holding down property taxes.
“This year, if we’re not going to also do that again ... then you’re going to be de facto raising people’s property taxes,” he said.
He was even more explicit in remarks reported later by the Naples Daily News: “I don’t care if we have to come back for special session 18,000 times, we’re not raising property taxes.”
Because of the way Florida’s education budget is structured, holding down property taxes could cause the state’s schools to forego $427.6 million that they would otherwise expect to receive, according to an estimate this summer by state economists.
The Legislature would have to kick in state money if it wants to make up the difference.
“That is a big policy issue that will be facing you this year and has a significant price tag either way you go with it,” said Amy Baker, head of the Legislature’s Office of Economic and Demographic Research.
Because of rising property values, additional money would flow without an increase to the property tax rate, or millage. But to keep owners’ tax bills from going up, the Legislature would have to reduce the millage, as it did early this year to balance out the higher property values.
At the same time, the state budget is teetering on the edge of a shortfall if lawmakers continue to add new spending at a rate similar to increases over the last three years. A forecast that shows the state with a slim surplus assumed that legislators would not spend additional money to keep the taxes from increasing again.
There are other pressures on the budget as well. State law requires $300 million from a legal settlement related to the Deepwater Horizon oil spill to go to counties affected by the disaster, but economists have counted that toward the total costs of the budget for the fiscal year that begins July 1.
Latvala said there has been some talk of rejiggering that law to account for a legal glitch, but he was opposed to any changes in how the money was allocated.
“We made the commitment, and I believe in keeping my commitments,” he said.