Miami: Screwed Again

The legislature helped taxpayers, but not in the Magic City

When Alan Murphy bought his two-story white 1924 Mission-style home in the historic Buena Vista East neighborhood seven years ago, he paid $1200 annual tax. Now he shells out five times that: $6200.

Like hundreds of thousands of other Florida residents, the trim, 51-year-old Murphy had high hopes the legislature would give him a little something at its special session last month.

Didn't happen.

Turns out the Florida Legislature blew it, thus depriving Murphy and thousands more Miami homeowners of tax relief. The lawmakers, it seems, forgot about the state's most prominent and second-largest city. Whoops!

"I can tell you one thing," says Murphy, the thick accent of his native Boston emerging in his voice, "where I'm from, this doesn't happen. Without a doubt, this is a banana republic. It's not by the people, for the people; it's by the politicians, for the developers and the big shots."

Perhaps most to blame for the morass, which will likely cost city taxpayers about $23 million next year, is House Speaker Marco Rubio, Florida's second-most powerful politician after Gov. Charlie Crist. Then there's the state Department of Revenue, which included booming Miami on a list of poor cities. And how about the Miami Herald, once the state's top watchdog in the capital but now an also-ran, which barely paid attention after the bill was passed.

"It was a mistake," admits Rubio, who spoke with the St. Petersburg Times first about the error. "We didn't know about it until final passage on the floor."

Rubio is a Republican whose district includes part of the Magic City, where officials collected $255 million in property taxes last year. He is responsible for approving virtually every law on which the House of Representatives votes. When he heard Miami had been excluded from the bill, "my first impression was anger," he says. "I thought this was a trick by some lobbyist who put the city on the list. I was going to find the staffer who helped them and fire that person."

It wasn't a trick. Here's what happened. Florida homeowners shell out thousands of dollars more in taxes now than they did five years ago. After legislators did nothing during their regular session in the spring, Governor Crist called them back a few weeks later to address the crisis.

On June 11 in Tallahassee, state Rep. Frank Attkisson, an Osceola Republican, submitted a bill that would — in general terms — freeze the tax rate at 2006 levels and then make additional cuts up to nine percent. One detail, buried on page 31 of the 69-page law, said cities that had been in a "fiscal hardship" in recent years only had to make additional cuts of three percent. There was also an exemption for small or new municipalities like Noma, in the Panhandle (pop. 213), and Doral.

At the last minute Palm Beach Rep. Priscilla Taylor, a Riviera Beach Democrat, made the loophole even bigger by inserting language that allowed the financially strapped towns to freeze the tax rate only, not cut further. Still, Rubio and other lawmakers seemed pleased by the overall plan; the speaker praised the bill on the home page of the House of Representatives Website: "We have reached an agreement on the tax cut levels for a historic relief and reform package that will save Florida taxpayers $31.6 billion over the next five years. This is, by far, the largest tax cut in Florida's history."

On June 14, all but one of the 118 representatives on the House floor voted for the bill, including lawmakers who represent Miami — not only Rubio but also Luis Garcia and Dorothy Bendross-Mindingall, both Democrats, and Carlos Lopez-Cantera, a Republican.

The legislators apparently missed the fact that Miami fell under the definition of "fiscal hardship." The city had been in a financial crisis in late 2001 and early 2002, when it had a $68 million deficit. Of course, there have been stratospheric growth and record tax collections during the past four years.

In the rush of the four-day special session, no one noticed the Miami gaffe until shortly before the final vote. "It was a terrible thing to do to the residents of Miami," says Rep. Julio Robaina, a Hialeah Republican. "We blew it. It should have never applied to the city of Miami."

Representative Garcia, who served on the property tax reform committee and traveled the state listening to homeowners' woes, says he heard Miami was exempt from cutting taxes after he returned from vacation in July — some two weeks after the vote. "Surprise, surprise, surprise," he says. Garcia adds the bill was "prepared in a vacuum," and he voted on it thinking Miami would be forced to freeze the millage rate and cut taxes an additional nine percent.

Says Attkisson, the bill's sponsor: "When I saw it, I said, 'How did that happen?'"

So Miami won't be required to reduce spending. By comparison, Miami-Dade County Mayor Carlos Alvarez proposed a $240 million budget cut in response to the legislature's property tax bill. Homeowners with property values of $225,000 might see $375 worth of savings. (Both the budget cuts and the savings could grow in the unlikely event a proposed constitutional amendment passes at the polls in January.)

At first few at city hall or Miami's largest daily newspaper realized there was a mistake: The Herald wrote on June 25 that the Magic City was exempt, but didn't note legislators' claims the vote was a screwup. Then on July 13, a full month after the special session ended, the St. Pete Times published its story detailing the gaffe. The reaction from readers was swift. "We need to cut Miami off the peninsula and send the whole thing to Cuba," wrote one person. Commented another: "Shows you just what kind of idiots run this state. It's part of the reason people are leaving Florida."

Miami city Commissioner Tomás Regalado was also angry. "I had a fit when I heard about this," he says. "You cannot do this to the residents of the poorest and biggest city in Florida."

Regalado would like to know what the city shelled out to lobby the legislature on property tax reform. He plans to address the issue at this week's commission meeting. "I want to know how much of my money was spent to screw me," he fumes. "This belongs on Comedy Central."

Miami Mayor Manny Diaz, who says he did not lobby for the exemption/mistake, was also surprised by the vote. He says tax relief will help people who own "$100 million buildings" more than the average Joe. "The rollback really affects government more than it helps the homeowner," he says.

Rubio vows to pressure Diaz and city commissioners to make additional cuts. The mayor's response: "He doesn't run the city. I do."

Whether or not Miami takes action, Rubio promises to "fix" the mistake during the upcoming legislative session. "It's easily correctable," he contends.

Homeowners in Miami — at least ones who have heard about the mistake — are disheartened by the news that property taxes likely won't fall. "It's disappointing, to say the least," says William Hopper, who bought his home in Morningside in 1984. "I think the politicians are sidestepping the whole issue."

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