House Tax Cuts Face Downsizing In Senate

February 12, 2016

A wide-ranging, nearly $1 billion tax-cut package got strong House approval on Thursday.

But with the Senate budget chairman calling $1 billion in tax cuts “fiscally irresponsible,” the Senate will have a big say about what eventually lands on Gov. Rick Scott’s desk.

The $991.7 million House package (HB 7099) includes reducing a tax paid on commercial leases, permanently eliminating a tax on manufacturing equipment and holding several types of sales-tax “holidays” for consumers.

The cuts would be enacted over two years, with many causing one-time hits on state revenue. Lawmakers have a budget surplus for the coming fiscal year, but state economists recently reduced revenue projections by about $400 million.

House Finance & Tax Chairman Matt Gaetz, a Fort Walton Beach Republican who has spearheaded the House package, said the measures will help boost Florida’s economy and he’s optimistic most of the proposals will get accepted by the Senate.

“The goal in the House is to return $1 billion to the people of Florida,” Gaetz said. “On the methodology, I’m eager to have a discussion … on how that can be done.”

The House voted 96-17 to approve the package, with a few Democrats saying they voted in favor because there are “good elements” in the proposal and that they anticipate the total cuts will be reduced during budget talks with the Senate.

“I do not believe there is one chance, one iota of a chance, that when we finish this process on day 60 (the final day of the legislative session), that there’s going to be a $1 billion tax cut,” said Rep. David Richardson, a Miami Beach Democrat who voted for the bill.

Scott has made $1 billion in tax cuts one of his top priorities this year. But the Senate, which remains apprehensive about making too many recurring, or permanent, cuts is using a $250 million figure as a starting point.

Senate Appropriations Chairman Tom Lee said it would be “fiscally irresponsible” to consider tax cuts in the range of $1 billion or to force the hands of future lawmakers by approving recurring cuts.

“My biggest concern is the volume. That’s my biggest concern,” said Lee, a Brandon Republican who has asked for a meeting with Scott’s staff to discuss the cuts. “My second concern is the amount of recurring that we do, because I don’t think it’s sustainable.”

Lee added that any cuts would be need to return money to “the broadest number of Floridians possible, to return it to people that have been part of the tax base in this state currently and for generations past, and not worry — quite so much in the tax package portions of this — of trying to attract businesses.”

Senate President Andy Gardiner, R-Orlando, said any cuts would have to be balanced with Scott’s other priority, a $250 million request for economic business incentives at the public-private Enterprise Florida, Inc.

“I want to give the governor as much flexibility as we can on EFI,” Gardiner said. “At some point all these things have to start coming together.”

The Senate has matched Scott’s incentives request, which also would revamp the process of awarding and handling incentive money.

The House has offered $80 million for the incentives, which is still an increase from the $43 million Enterprise Florida received for the current fiscal year.

House Transportation & Economic Development Appropriations Chairman Clay Ingram, R-Pensacola, said Wednesday that the funding isn’t there to match Scott’s incentive request.

Meanwhile, the Senate has been slowly piecing together its tax package through individual member bills still in the committee process.

The House tax-cut package and the individual Senate bills do not include the largest part of Scott’s requested cuts — a permanent elimination of income taxes on manufacturing and retail businesses. The cut is projected as a $770 million recurring hit to state revenue.

by Jim Turner, The News Service of Florida

Comments

2 Responses to “House Tax Cuts Face Downsizing In Senate”

  1. M in Bratt on February 15th, 2016 4:15 pm

    I wish our Board of County Commissioners would take a trip to capital city and take lessons on budget cutting. All they seem to be able to do is tax, and tax some more

  2. Rex S on February 12th, 2016 9:55 am

    Wouldn’t it be a better idea to invest the surplus in a diversified portfolio with a cap of say Twenty Billion as insurance against an economic downturn? I don’t work less because I have a little extra in savings at the end of the year, I work hard at keeping it.

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