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Should Florida Abolish The Property Tax? · Conversations: Special Guests with Preston Scott

• 0:00
  Speaker 1: And so we are here for the third hour. In
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  Speaker 1: joining us this hour is one of our good friends,
• 0:04
  Speaker 1: longtime friends. He is to me one of the most
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  Speaker 1: gifted political analysts when it comes to reading the map
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  Speaker 1: of Florida that I've ever I've ever run across. Doctor
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  Speaker 1: Bob McClure, President of the James Madison Institute.
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  Speaker 2: Hello, Hello, sir, how are you?
• 0:19
  Speaker 1: I'm good? Are you?
• 0:20
  Speaker 2: I'm great? Truth a stranger in fiction?
• 0:22
  Speaker 1: MMA South Lawn? Was your reaction like mine mine? I
• 0:27
  Speaker 1: don't know if you heard any part of it. Mine was, Oh,
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  Speaker 1: this is so cool, but I think it's so wrong.
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  Speaker 2: Yeah, yeah, you know. I didn't grow up with MMA.
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  Speaker 3: I mean I grew up with Frasier, Ali Sugar, Ray Leonard,
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  Speaker 3: Tommy her So. I was a boxing guy. So when
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  Speaker 3: MMA came out, I was a little older, my kids
• 0:47
  Speaker 3: were young. I wasn't paying attention. I felt like it
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  Speaker 3: was just a bar fight, you know, And look at
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  Speaker 3: where it is today now.
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  Speaker 2: On the on the south the South lawn to the
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  Speaker 2: White House.
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  Speaker 3: Literally, I thought it was just a broken bottle bar
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  Speaker 3: fight ten years and now it's on the south lawn
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  Speaker 3: of the White House.
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  Speaker 2: It's crazy. Now.
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  Speaker 1: If Congress did that if we just put the representative
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  Speaker 1: from the left and the right. Here's the thing, I
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  Speaker 1: don't know that there's anybody on the left that could
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  Speaker 1: stand up to some of the boys in the right
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  Speaker 1: side of the isle in Congress these days. Not some
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  Speaker 1: of those veterans, some of those former seals that are
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  Speaker 1: serving right now.
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  Speaker 2: All right, let's talk.
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  Speaker 1: About something that is going to impact every single person
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  Speaker 1: listening to us, whether they own property or they rent.
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  Speaker 1: Property taxes impacts everyone. The governor has taken a position that, frankly,
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  Speaker 1: I've advocated for twenty three years on this show, find
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  Speaker 1: a way to do away with property tax so people
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  Speaker 1: can own their own home, own their own property, not
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  Speaker 1: have to worry about losing it in principle, Before we
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  Speaker 1: get to the specifics of that idea and what it
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  Speaker 1: might mean and how it might look. Your thoughts on
• 1:55
  Speaker 1: the notion. I love the idea. I think it's important.
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  Speaker 3: I think you have been advocating it for twenty plus years.
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  Speaker 3: Marco Rubio, when he was Speaker of the House, when
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  Speaker 3: he was a young buck, advocated the same thing. Just
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  Speaker 3: nobody listened to him. Do you ever really own your
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  Speaker 3: house if you're paying government rent? Right, and so I
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  Speaker 3: love the idea. I would love to get rid of
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  Speaker 3: property taxes for all the reasons that the flat tax
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  Speaker 3: user tax crowd loves, you know, getting rid of the
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  Speaker 3: income tax. The reality is, how are we going to
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  Speaker 3: do this because it's a very large state. Local municipalities,
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  Speaker 3: the Floridians have said they want to get rid of
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  Speaker 3: property taxes or at least reduced them significantly, but they
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  Speaker 3: don't want to lose services. I get it, you and
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  Speaker 3: I know most of the time, particularly the local level,
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  Speaker 3: but really at any governmental level, it's rarely, almost never
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  Speaker 3: about revenue. It's almost always about spending. So figuring out
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  Speaker 3: the spending needs at the local level, eliminating property taxes
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  Speaker 3: and then what do you what do you do instead?
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  Speaker 3: So there are a lot of options on the table.
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  Speaker 3: So I like the idea. I think we need to
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  Speaker 3: do it. But we also live in a state Preston,
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  Speaker 3: where the largest county in Florida is larger than many
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  Speaker 3: states Miami. Dad County has almost three million it's got
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  Speaker 3: like two point eight million people. The smallest county in
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  Speaker 3: Florida's Liberty County. It's got eleven thousand people. In the
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  Speaker 3: entire county. There's a big difference, right, so these rural
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  Speaker 3: counties also have to be accounted for no pun intended,
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  Speaker 3: and so figuring that out is going to be an issue.
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  Speaker 3: Now you know, this is a self serve service announcement.
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  Speaker 3: JAYMI is going to come out in the fall four
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  Speaker 3: committee weeks with a huge study on what the options are,
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  Speaker 3: what we can do as a state, and why we
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  Speaker 3: We're not going to say do this one thing. We're
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  Speaker 3: going to say, here are the options.
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  Speaker 2: Pros and cons.
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  Speaker 3: Yes, but let's move towards getting rid of property taxes.
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  Speaker 3: I applaud the governor for beginning the discussion.
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  Speaker 1: We're going a little deeper into the topic of eliminating
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  Speaker 1: property tax maybe talking about Okay, what does that look
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  Speaker 1: like in reality. Doctor Bob McClure with us from the
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  Speaker 1: James Madison Institute. Blazing Golia gets named CFO to replace
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  Speaker 1: Jimmy petronis popular pick. I think you would say, yeah,
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  Speaker 1: Blaze yeah. And one of the first things he does
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  Speaker 1: is he says, we're going to go around the cities
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  Speaker 1: and we're going to look into how everyone's spending the
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  Speaker 1: property tax money that the tax dollars that are coming
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  Speaker 1: in in each community. Word is that the city manager
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  Speaker 1: at Gainesville promptly resigned in advance of that look in general,
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  Speaker 1: is your thought that this is being done as a
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  Speaker 1: precursor to the discussion on property tax elimination.
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  Speaker 3: Well, I think it's good government, for one thing, But
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  Speaker 3: I also know that this governor and Blaze are very
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  Speaker 3: interested in where the issues are at the local level.
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  Speaker 2: In a state like Florida.
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  Speaker 3: This is not always true in every other state, but
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  Speaker 3: in a state like Florida, we at the state level
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  Speaker 3: are very good about spending less money, per se. I
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  Speaker 3: say very good. Where you know it's a government, it's
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  Speaker 3: the local local municipalities where the where the real spending
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  Speaker 3: and the phantom tax increases are taking place. So for example,
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  Speaker 3: a Callier County, a Palm Beach County, some of those
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  Speaker 3: larger counties, their budget's double for no reason other than
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  Speaker 3: property values increase about every six or seven years. They
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  Speaker 3: don't cut spending. There's no change there, there's no tax reduction,
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  Speaker 3: there's none of that. We know here at the local
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  Speaker 3: uh here in Tallahassee, in in Leon County, how the
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  Speaker 3: local government uses the utility right to fund projects at
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  Speaker 3: the local level. Yeah, so what Blaze, I think is
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  Speaker 3: going to do is to go in I don't know
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  Speaker 3: how many, and I don't know where, go into some
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  Speaker 3: of these local municipalities and say how are you spending
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  Speaker 3: this money? And if we're spending this money here, here,
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  Speaker 3: and here, we can certainly.
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  Speaker 2: Cut property taxes. Preston you.
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  Speaker 3: And I know that most government issues are about not
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  Speaker 3: about revenue, They're about spending. Sure, and it's almost always true,
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  Speaker 3: God bless Rocky Hannah, but he's he's wrong about the
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  Speaker 3: financial situation for the county and he backed off of it.
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  Speaker 3: If you notice, it's almost always about spending, not revenue.
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  Speaker 3: So Blaze and I'm not speaking for Blaze, but my
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  Speaker 3: guess is the governor wants to have them open the
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  Speaker 3: books and see where the money's going and then say
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  Speaker 3: here's why we can cut property taxes. And there are
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  Speaker 3: a lot of ways to do it. You can raise
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  Speaker 3: the homestead exemption, you can eliminate it, and raise the
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  Speaker 3: sales tax. I'm not advocating for that because that there
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  Speaker 3: are a lot of issues with that. You can you
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  Speaker 3: can do like a levy cap, where you essentially say
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  Speaker 3: to local governments, here's how much you can spend you
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  Speaker 3: can spend it on whatever you want. You can spend
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  Speaker 3: it on pride parades, you can spend it on libraries,
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  Speaker 3: you can spend it on children's services, whatever you want.
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  Speaker 3: But here it's called a levee cap. This is how
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  Speaker 3: much you can spend, and then you index it to
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  Speaker 3: inflation and population growth. Okay, and that way, you know
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  Speaker 3: a lot of this preemption, and I understand at the
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  Speaker 3: local level people get very frustrated about preemption at the
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  Speaker 3: state level preempting a lot of local level stuff.
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  Speaker 2: So put a levee cap on it and say, here's
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  Speaker 2: what you can spend.
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  Speaker 3: I don't care how you spend it. You spend it
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  Speaker 3: any way you want. But you spend that money and
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  Speaker 3: then you index it to inflation with population growth. The growth.
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  Speaker 3: The problem is the rural counties. You know, like we said,
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  Speaker 3: you've got a Miami Dade County of two point eight million.
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  Speaker 3: Inflation plus population is going to mean growth. Liberty County
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  Speaker 3: has eleven thousand people. Madison Counties, you know, in the
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  Speaker 3: in the low twenties, you and I know, we can
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  Speaker 3: drive twenty minutes outside of Tallahassee and you're in these
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  Speaker 3: rural counties. So there are allowances that have to be
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  Speaker 3: made for those. I don't have an answer for you
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  Speaker 3: on that yet, But we can't just say eliminate all
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  Speaker 3: property taxes. Good luck Madison County, good luck Liberty County.
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  Speaker 1: Is it fair to say that what ought to be
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  Speaker 1: taken completely off the table is the idea of lowering
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  Speaker 1: the sales tax because to me, you know, I appreciate
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  Speaker 1: let's have a bunch of ideas on the table and
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  Speaker 1: make them all better. But the idea of lowering the
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  Speaker 1: sales tax when we have so many visitors, not just
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  Speaker 1: foreign visitors that use our infrastructure, that use our roads,
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  Speaker 1: but people that visit from across the country that pay
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  Speaker 1: the freight for things that we do here in Florida,
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  Speaker 1: that just seems silly to me.
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  Speaker 2: Yeah.
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  Speaker 3: And the number that you know, when Speaker Perez was
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  Speaker 3: talking about it, you're talking about I think the number
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  Speaker 3: he proposed ended up saving flirt it's like three hundred
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  Speaker 3: bucks a year. I mean, we're not I mean property taxes.
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  Speaker 2: Your people are.
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  Speaker 3: Playing thousands of dollars right, So the sales tax should
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  Speaker 3: absolutely we need to be careful about that. We have
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  Speaker 3: one hundred and forty million tourists that come to Florida.
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  Speaker 3: That's the entire country of Germany every year coming to Florida,
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  Speaker 3: using our services, buying our gas, paying our sales tax,
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  Speaker 3: and then they go home. And so we need to
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  Speaker 3: be very careful about reducing the sales tax. Why not
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  Speaker 3: let other people pay? So what does your gut tell
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  Speaker 3: you is going to be the.
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  Speaker 1: Best possible solution for moving forward?
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  Speaker 3: I don't It's going to be interesting because the dynamic
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  Speaker 3: is obviously there's no secret the House Speaker and the
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  Speaker 3: Governor really had a difficult time getting.
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  Speaker 2: Along in the last legislative session.
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  Speaker 3: Right, we have a Senate President who seems to be
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  Speaker 3: on board with looking at this property tax. You know,
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  Speaker 3: they were supposed to have the road show, the Legislative
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  Speaker 3: roadsh was supposed to be all summer and never happened,
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  Speaker 3: and then they were going to start in September, and
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  Speaker 3: now they're going to just stay in Tallahassee apparently, and
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  Speaker 3: if anybody cares around the rest of the state, you
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  Speaker 3: got to come to Tallahassee, which you and I know
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  Speaker 3: how hard it is to get here. And so I
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  Speaker 3: don't know, I don't know what what's going to happen.
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  Speaker 3: What we're gonna do with the James Madison insutes, we're
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  Speaker 3: going to say, here are your options.
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  Speaker 2: Okay, here's what you can do.
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  Speaker 3: I think the cleanest thing to do is the levy
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  Speaker 3: caps for local government index to inflation and population growth,
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  Speaker 3: because it allows you just spend the money the way
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  Speaker 3: you want.
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  Speaker 1: Look where did they get the money to spend? Well,
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  Speaker 1: that's that's that's the question.
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  Speaker 3: The governor, if I understand him right, has said, well,
• 10:56
  Speaker 3: you can do you can do a number of things.
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  Speaker 3: You can raise the sales tax the state. And I
• 11:03
  Speaker 3: don't know, don't quote me on this, but I think
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  Speaker 3: the governor has said that there is like a this
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  Speaker 3: is my word, not his, like they would float revenue
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  Speaker 3: to some local counties at the state level.
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  Speaker 2: I think he said that, and.
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  Speaker 1: The smaller counties that don't generate revenue, that don't have
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  Speaker 1: a population base to support sales right right.
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  Speaker 3: That's an option on the table. And so it's kind
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  Speaker 3: of like it's kind of like things have to it's
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  Speaker 3: like a compass, you know, if you're if we're going
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  Speaker 3: to do this, this is very different. We have to
• 11:34
  Speaker 3: have the data first, but you're at some point the
• 11:38
  Speaker 3: compass has to align to where you are in the forest, right,
• 11:41
  Speaker 3: you have to and and at some point you're going
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  Speaker 3: to have to have this notion that if you cut
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  Speaker 3: property taxes, then those local municipalities and I'm not talking
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  Speaker 3: about rural counties, but the ones who have a lot
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  Speaker 3: of money, which are a lot of counties, they're going
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  Speaker 3: to have to then align their revenues or they're spending
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  Speaker 3: to the new reality. Right, And so I think the
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  Speaker 3: cleanest thing to do is to raise the exemption and
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  Speaker 3: to have levy caps, and you could give them maybe
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  Speaker 3: there's a.
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  Speaker 2: Two or three year timeframe, so a gradual transition period. Yeah.
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  Speaker 1: Do you see something, and I'll just throw an idea out.
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  Speaker 1: Do you see something where, for example, someone that has
• 12:23
  Speaker 1: a mortgage continues to pay property tax until their mortgage
• 12:27
  Speaker 1: is paid off and then it stops.
• 12:28
  Speaker 3: Yeah, that's an option too. Absolutely, absolutely, I think that.
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  Speaker 3: I think that's a very very interesting idea, and I
• 12:39
  Speaker 3: think you're going to see probably five or six plausible options.
• 12:45
  Speaker 3: Some people are saying, let's just eliminate property taxes and
• 12:47
  Speaker 3: allow counties to raise the sales taxes high as they want.
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  Speaker 3: I think I think that's its struggle. I don't I
• 12:53
  Speaker 3: don't trust that. I don't trust that at all. Yeah,
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  Speaker 3: but some of our more libertarian friends are saying, let's
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  Speaker 3: just get rid of property taxes, you know how they are,
• 13:00
  Speaker 3: Let's just make it an user tax. And I'm not
• 13:02
  Speaker 3: being disrespectful. I'm just that makes me nervous, right, because
• 13:07
  Speaker 3: what's that old line, Figures don't lie, but liars figure.
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  Speaker 2: And so.
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  Speaker 3: What you have is you have just like and I'm
• 13:15
  Speaker 3: not calling local delegation liars. Please don't get it send
• 13:18
  Speaker 3: pressed in any emails. But I go back to the utilities.
• 13:21
  Speaker 3: They use that as a piggy bank, and it's a
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  Speaker 3: de facto tax increase. And it's not just Tallahassee.
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  Speaker 1: And it's on the people they claim they want to
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  Speaker 1: help the most because it's a regressive tax. It's on
• 13:33
  Speaker 1: the people that you got to pay the utility bill.
• 13:36
  Speaker 1: The renters and everybody are paying property taxes, not just
• 13:40
  Speaker 1: in their rent, but now they're paying them through their utility.
• 13:42
  Speaker 2: That's exactly right.
• 13:44
  Speaker 3: So I think we are in the early stages of
• 13:48
  Speaker 3: pulling the data get together. I can't wait to come
• 13:50
  Speaker 3: back on and talk it through with you. But I
• 13:53
  Speaker 3: think there are a lot of here's the issue. It's doable,
• 13:57
  Speaker 3: we can do this. The governor threw it out, you know,
• 14:00
  Speaker 3: six eight months ago, and people thought he was nuts,
• 14:03
  Speaker 3: And now people are looking for ways to do it.
• 14:05
  Speaker 3: This is actually doble. Yes, this is the way we
• 14:08
  Speaker 3: should conduct an audit of government.
• 14:13
  Speaker 1: And that once again sets Florida up not just consumption
• 14:16
  Speaker 1: tax as opposed to an income tax, but now saying hey,
• 14:20
  Speaker 1: you can own your own property here in Florida forever more.
• 14:23
  Speaker 3: Well, and that's a whole other show. Because what we
• 14:25
  Speaker 3: do in Florida, Preston has national implications. So I can
• 14:28
  Speaker 3: tell you at JMI we get calls every day from
• 14:31
  Speaker 3: other states, how can we be more like Florida? And
• 14:34
  Speaker 3: then think of this, what implication is there for the
• 14:39
  Speaker 3: federal government?
• 14:41
  Speaker 2: That's my point.
• 14:42
  Speaker 3: Yeah, If the third largest state in the country, with
• 14:45
  Speaker 3: a thousand people moving here today, with the most diverse
• 14:49
  Speaker 3: population in the entire country can do this, how many
• 14:53
  Speaker 3: other states around the country can do this? And what
• 14:55
  Speaker 3: are the implications for the federal budget? I mean this
• 14:59
  Speaker 3: is Florida lead is first in Then I say this
• 15:02
  Speaker 3: all the time, Florida's first in the nation when it
• 15:04
  Speaker 3: comes to policy and politics, because everyone right or wrong.
• 15:07
  Speaker 3: That's why not rolling back the property insurance was so
• 15:10
  Speaker 3: critical because the rest of the country is watching what
• 15:13
  Speaker 3: we do. We get it right here, it has national implications.
• 15:16
  Speaker 3: When you and I were growing up, it was California
• 15:18
  Speaker 3: that everything emanated from California. I was never California to me, right, well,
• 15:22
  Speaker 3: but like the Reagan Revolution.
• 15:24
  Speaker 2: Zone, I was close to it. Right.
• 15:26
  Speaker 3: But like the Reagan Revolution and sushi and Valley Girls, right,
• 15:31
  Speaker 3: it's Florida.
• 15:31
  Speaker 2: Now.
• 15:32
  Speaker 3: I'm telling you what comes out of Florida has national implications.
• 15:35
  Speaker 3: And if we can get this right on the property tax,
• 15:37
  Speaker 3: it's a game changer.
• 15:38
  Speaker 1: I cannot wait for our September visit.
• 15:40
  Speaker 2: I look forward to it. Thanks for the time, Thanks
• 15:42
  Speaker 2: for having me
• 15:43
  Speaker 1: Doctor Bob McClure with me from the James Madison Institute
• 15:46
  Speaker 1: twenty nine past the Hour