Scott tax cut plan draws doubts

By JIM TURNER
THE NEWS SERVICE OF FLORIDA

THE CAPITAL, TALLAHASSEE, February 14, 2017......... Gov. Rick Scott may be "a little ambitious" in seeking $618.4 million in tax cuts, a key lawmaker said Tuesday, while others said the proposed cuts favor corporations over individual Floridians.

House Ways & Means Chairman Jim Boyd, in saying the governor's recommendation may be "a little ambitious," acknowledged the proposal might not fit with the state's current tight budget and that the House is working on its own proposal that likely won't be as large.

"I don't have a number in mind," Boyd, R-Bradenton, said after his committee reviewed Scott's proposal. "I mean $600 million is pretty strong. I'd love for his number to be correct, because that means we're in better shape than we think we are in terms of the money that will be available to use."

Scott's proposal features a reduction in a tax on commercial leases, an increased corporate-income tax exemption and a number of sales-tax "holidays" for consumers.

Meanwhile, Boyd said the House continues to look at preventing an increase in local property taxes as part of the state's school-funding formula, a move that could amount to more than $400 million.

"Hopefully we've got some other ideas and other ways that we want to put money back in taxpayers' pockets," Boyd said. "We certainly have a list of priorities, and it's just a matter of what we can fund at the end of the day."

Boyd's comments add more doubt to the possibility that Scott will get tax cuts in the amount and shape he wants.

Last year, Scott sought more than $1 billion in tax cuts, but legislators facing diminishing revenue projections agreed on a package that totaled $129 million, which included a Scott priority to eliminate a sales tax on manufacturing equipment.

However, lawmakers took credit for much larger "tax relief" by including money used to hold down local property taxes that would otherwise go into the school-funding formula.

Rep. Evan Jenne, D-Dania Beach, said that while Scott's new tax-cut requests appear "sound and logical and they make sense," the majority of the savings will end up in corporate hands rather than with "everyday, individual Floridians."

"I understand that a lot of these are smaller businesses, but nonetheless it's an overall economic theory, and it's overt at this point when you look at these numbers," Jenne said.

The cuts are built into Scott's proposed $83.5 billion budget for the fiscal year that starts July 1. The proposal is $1.2 billion more than the current year's spending plan and seeks to boost education funding, cut spending on hospitals and adjust pay for corrections officers and state law enforcement.

The tax-cut package has eight main components, with each proposed to some degree in past years.

The prime feature is a proposed reduction on a commercial lease tax, from 6 percent to 4.5 percent. That would save $454.4 million on state and local taxes in next fiscal year.

Scott also is taking another crack at lowering corporate income taxes. Current law exempts the first $50,000 of a corporation's income from the tax. By increasing the exemption to $75,000, as he has sought in past years, the governor's office estimates that 2,500 businesses would be exempt having to pay the tax and another 11,500 would get a savings.

Scott was able to increase the exemption from $5,000 to $25,000 in 2011 and to $50,000 a year later.

Christian Weiss, a policy coordinator in Scott's Office of Policy and Budget, said business savings are expected to be used to add jobs and increase capital investments.

"A lot of the businesses that pay the commercial rent taxes are small businesses, they are sole proprietorships, they're partnerships, and to the extent they don't have to pay this tax anymore … it's a significant amount of money that they will no longer have to pay," Weiss told the committee. "Any cost (savings) to the business goes straight into their income or into their investment possibility."

For most Floridians, the biggest features of the tax package is a series of sales-tax "holidays."

A 10-day period for "back-to-school" shopping in August would allow Floridians to avoid paying sales taxes on clothing and footwear priced at $100 or less, on school supplies at $15 or less, and on the first $750 of the prices of personal computers. The holiday is collectively projected to save shoppers $72 million.

A Veterans Day discount period in November would last three days and mix the school holiday discounts with lifting sales taxes on books under $50, recreational equipment up to $100, and televisions and household appliances up to $1,000. The holiday savings is estimated at $18.4 million.

A nine-day holiday period on hurricane supplies is expected to save $6.9 million by exempting such items as self-powered lights, radios, waterproof sheeting, portable generators, shutters, gas tanks, batteries, food storage coolers and reusable ice.

Also, sales taxes would be lifted on certain camping and fishing gear on July 1, the start of the 2017-2018 fiscal year. The one-day holiday would exempt pop-up shelters, sleeping bags, canoes, life vests, bug spray, first-aid kits and flashlights. The savings to Floridians is projected at $500,000.

The governor also wants to revive a tax break on college and university textbooks, projected to save students $48 million, and exempt school book fairs from having to collect sales taxes, a $3 million savings.

The proposal also seeks to lift fees on military veterans getting commercial driver's licenses or for citizens over 80 surrendering their driver's licenses or renewing identification cards.