The Florida HBA's concerns over massive property tax cuts leading to increased impact fees spilled over into a political donnybrook in which prominent state politicians returned campaign contributions to the HBA, and Wayne Bertsch, the trade group's political director, was dismissed.
It all started in June when the state legislature passed a $16 billion property tax reform measure. The new law mandates that cities and counties roll back their fiscal 2007–2008 budgets to 2006–2007 levels, plus reduce spending from 3 percent to 9 percent, cuts that are based on statewide averages for how municipalities levy property taxes.
The public also will vote in the January 2008 primary election on a constitutional amendment that would exempt 75 percent of the first $200,000 of the value of a home and 15 percent of the next $300,000. The maximum property tax exemption would be $195,000. The measure seeks to offer an additional $16 billion in property tax relief to homeowners, many of whom have seen their valuations skyrocket during the real estate boom of recent years.
The state HBA, concerned that reduced revenue from property taxes could prompt municipalities to increase impact fees, lobbied hard for the legislature to cap impact fees as part of the initial legislation. Unfortunately, the legislation was drawn up along the narrow issue of property tax reform, so it would have taken a three-quarters vote of both the House and Senate for the impact-fee component to be considered. BUILDERs' attempts to cap impact fees failed.
Once the law passed, the builders' next move was to work on a proposal to cap fees during the 2008 legislative session. In early July, John Wiseman, president of the Florida HBA, posted a message on the trade group's Web site indicating that the association would only fund candidates who supported a cap on impact fees.
The direct connection between a politician's vote and a campaign contribution set off a political firestorm that led Senate President Ken Pruitt to return $35,000 in campaign contributions. Another politician, Sen. Jeff Atwater, returned $2,500.
“We just don't operate this way,” says Kathy Mears, a spokesperson for Sen. Pruitt. “The state legislature is not an auction for the highest bidder,” she says, noting that Pruitt is a pro-business Republican and has been a longtime supporter of builder issues.
Public interest groups such as Common Cause were appalled.
“This shows how campaign contributions are used to manipulate public policy,” says Ben Wilcox, executive director of Common Cause Florida.
Faced with a public relations disaster, the Florida HBA quickly pulled Wiseman's original message off the site and issued an apology.
“Although it is true that impact-fee reform is very important to Florida's economy and specifically the construction industry, it was incorrect for me to indicate that support of any one bill is the only criteria to be used in a PAC evaluation,” Wiseman's message reads.
The Florida HBA declined to comment on this story.
At press time, cities and counties were slowly making announcements about proposed budget cuts, and public officials were quoted in press accounts saying they were considering impact-fee hikes.
Miami-Dade County, for example, announced $240 million in cuts in early July and said the county could face another $220 to $240 million in cuts if voters approve the additional exemption measure next January.