January 28, 2002
Source: Floridians Against Inequities in Rates

A political action committee has been formed to inform Floridians about the Senate’s tax reform proposal and their role in determining the state’s tax structure and counter false ads broadcast by radio and television stations.

"Floridians Against Inequities in Rates" will be co-chaired initially by Sen. Jack Latvala, R-Palm Harobor and Sen. Ken Pruitt, R-Port St. Lucie. A group of distinguished Floridians is currently being recruited to compose the committee.

"With some groups deliberately misleading the people of this state, it’s imperative that a group be formed to counter the false assertions being made, " said Latvala. "We can’t stand by while other organizations act irresponsibly by spreading misinformation."

Several of the Senate co-sponsors, flanked by members of AARP, school board officials, hospital representatives, and city and county-officials, derided the inaccurate and misleading ads.

"The people of this state deserve to hear accurate information and be given the opportunity to have a say on Florida’s tax system, " McKay said. "FAIR will ensure that correct and truthful information is shared with Floridians so they can have a voice in their government."

The proposal consists of a constitutional amendment that will be voted on by Floridians and an implementing bill. The amendment requires a 3/5 vote from the legislature before it can go to the ballot to be voted on by citizens.

The constitutional amendment is designed to ensure a fair and stable funding source that requires everyone to contribute their share to Florida’s tax base. It would reduce the sales tax from 6% to 4.5%, effectively reducing taxes by 25% on almost $300 billion of currently taxed transactions, and expand the sales tax base by removing the exempt status of many services that are not taxed.

• FAIR will promote the components of the constitutional amendment and bill: Basic needs like health care services, prescription drugs, groceries, and residential rent will not be taxed.
  
• Many purchases that affect small businesses will continue to be exempt.
  
• The tax rate for commercial utilities will be reduced from 7 percent to 4.5 percent.
  
• Agriculture and forestry services and the purchases of agriculture items are exemp
  
• Money lending by banks is exempt.
  
• Insurance premiums are exempt.
  
• Publishing and print advertising is exempt, as is radio and television broadcasting advertising – all of which impact small businesses.
• Services that enable people to own homes and maintain households will not be taxed.
  
• Services by real estate agents, insurance agents, residential utilities, brokers and money lending by bank and non-bank financial institutions are exempt.
• Tourists will bear their fair share of the tax burden in Florida.

According to Pruitt, FAIR’s co-chair, Florida’s current tax system was put into place in 1949 and the single largest source of revenue for Florida is sales tax. When there is a downturn in the state’s economy, the state collects fewer sales tax dollars, used to pay for education, public safety and services to our children and elderly.

"Why shouldn’t Floridians be given the chance to decide the state’s tax structure since they contribute so heavily to the funding of services?" Pruitt said. "While Florida families pay 6% on most household purchases, many special interest groups enjoy sizeable tax breaks. It’s time for a more equitable system where special interests pay their fair share too."

Supporters of the tax reform proposal participating in the announcement include the American Assn. of Retired Persons, Florida Assn. of School Boards, Florida Hospital Assn., Florida League of Cities, Florida Assn. of School Superintendents, and Florida Assn. of Counties.

Letter From Law firm Representing FAIR