Scott Pitches Business Friendly Tax Cuts

November 7, 2015

Gov. Rick Scott, who has already asked lawmakers for $250 million that could be used to lure corporations to Florida, rolled out a proposed $1 billion tax-cut package on Thursday.

A Democratic leader decried the tax-cut proposal as a way of gutting state government programs, while a key Republican lawmaker called the requested cuts “bold.”

The bulk of the proposed cuts, which would be amassed over a two-year period, involve permanently eliminating the income tax on manufacturing and retail businesses, a cut the governor’s office estimates at $770 million.

The package also would make permanent the elimination of a tax on manufacturing equipment, reduce a commercial lease tax and extend a temporary elimination of sales taxes on college textbooks.

Scott said in a news release that the tax cut package is “putting job creators on the road to success for years to come.”

“The more we can cut taxes — like the one on commercial lease — the more we can grow our small businesses in Florida and further diversify our economy to invest in our future,” Scott said.

For most Floridians, the cuts will be seen through a pair of sales tax “holidays,” which total just over $70 million. A 10-day back-to-school “holiday” would lift sales taxes on certain school supplies, clothes and some electronics. A separate nine-day period would be set aside to remove sales tax on hurricane supplies.

House Minority Leader Mark Pafford, D-West Palm Beach, said fulfilling Scott’s request would require spending cuts to areas such as the environment and education.

“So we have services that are responsive to the people of Florida, he’s gutting them,” Pafford said. “He’s continuing to move and follow through on his pledge of smaller government. And that pledge is destroying Florida and eating up reserves, paying no attention to what his own agencies are claiming will happen.

“His legacy is going to catch up to him,” Pafford added. “Gov. Scott has led us in to the dark ages and under his control we’re not going to see a renaissance.”

The call for the cuts comes as state economists in September projected lawmakers will have a $635.4 million surplus when crafting the budget for the next fiscal year. In addition to seeking the tax cuts, Scott is pushing for $250 million in economic-development incentive money.

House Finance & Tax Chairman Matt Gaetz, R-Fort Walton Beach, called Scott’s tax-cut proposal “bold.” Gaetz’s committee will work on a final tax-cut package during the legislative session that starts in January.

“Who says you should only cut taxes in an amount that equates to the surplus?” Gaetz said. “Some of us believe you should actually shrink the size of government.”

Gaetz said he’s also encouraged that the governor included reducing the commercial lease tax, which the committee chairman said is a personal priority.

“We’re already seeing the governor reflect priorities of the House in his tax plan, and we’ll do all that is appropriate to vet the proposals he’s put forward and determine what impact they’ll have on Florida’s expanding economy,” Gaetz said.

Senate President Andy Gardiner, who in September said $250 million would be a starting point in discussions on tax cuts, “would certainly support increasing that amount provided we can maintain the structural balance within our budget,” spokeswoman Katie Betta said in an email Thursday.

A number of the proposals are already moving in the Senate.

Proposals for a 10-day sales tax holiday on back-to-school items (SB 198) and to reduce the tax on commercial leases from 6 percent to 5 percent (SB 116) have each gone through two Senate committees without finding any opposition.

The state Revenue Estimating Conference estimates the “back-to-school tax holiday” could save shoppers $68.7 million, cutting state revenue by $56.1 million and local government revenue by $12.6 million.

Reducing the commercial lease tax by a single percentage point is projected to reduce state and local government revenue by $199.6 million next fiscal year, with the amount growing to $287 million. The reduction would go into place Jan. 1, 2017, which is in the middle of next fiscal year.

Scott announced the proposed tax-cut package at the annual Manufactures Association of Florida Summit in West Palm Beach. He had earlier called for making the manufacturing-equipment tax cut permanent.

Lawmakers in 2013 approved a three-year moratorium on the manufacturing-equipment tax, but the tax is scheduled to be revived in 2017. Scott last year projected that companies will have to pay $142.5 million annually if the tax returns.

Cutting the commercial-lease tax is a priority for a number of business groups.

The conservative-advocacy group Americans for Prosperity-Florida, which considers reducing the commercial lease tax a top priority, wasted little time calling on lawmakers to work with Scott on his proposed cuts. Also, the group reiterated its opposition to requests to fund professional sports stadiums in Miami, Jacksonville, Tampa and Daytona Beach or to create incentives for the film and television industry.

“While legislators and the governor are making great strides to reduce burdens such as the commercial lease sales tax on Florida families and businesses, they should be working to eliminate taxes that stifle growth and competition all together,” AFP-Florida State Director Chris Hudson said in a release.

Throughout his nearly five years in office, Scott has made a top priority of cutting taxes.

As he ran for re-election in 2014, Scott campaigned on a promise of $1 billion in tax cuts over a two-year period. Lawmakers put together a wide-ranging tax-cut package during a June special session that is projected by state economists to cut revenue by $372.4 million this fiscal year.

by Jim Turner, The News Service of Florida

Comments

3 Responses to “Scott Pitches Business Friendly Tax Cuts”

  1. Rufus Lowgun on November 9th, 2015 11:45 am

    Everyone loves a tax cut, but how about we see where the spending cuts are going to come before we start reducing revenue. Lots of roads that need fixing and firemen that need to get paid before we start handing out tax cuts to Rick Scott’s business buddies.

  2. Gop on November 7th, 2015 11:31 am

    @Mike Exactly! We must have the best schools, roads, and police/fire stations around. Maybe start a rainy day fund for the future.

  3. Mike on November 7th, 2015 6:28 am

    More corporate welfare.

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