During the 2014 legislative session, which starts Tuesday, Florida lawmakers are all set to tackle Gov. Rick Scott’s request for half-billion dollars in tax and fee cuts, rising to the challenge with a wide range of proposals.
Foremost on the list are rollbacks to vehicle registration fees that Republicans raised in 2009 to address budget shortfalls.
Sales-tax holidays will also return, with tax-free periods for hurricane preparedness products possibly joining the popular back-to-school tax holiday.
Using a smorgasbord of suggestions for tax breaks, both Scott and legislators could conceivably reduce Florida state revenues by as much as $1 billion over the next few years.
But they first have to pass both chambers.
Senate President Don Gaetz has one suggestion — the broader the measure, the more likely it will be successful.
“This is a real opportunity to give some relief to working Floridians,” Gaetz told Jim Turner of the News Service of Florida. “I think that’s much more important right now than picking out some small group and giving them a tax break.”
Broad measures could mean some proposals will have a tougher time passing the Legislature, such as a tax cut for commercial leases and energy use by businesses.
With over $1 billion in surplus projected for 2014-2015, there is a lot of leeway in what and where to cut, in addition to bolstering the money set aside for schools and child protection.
But returning money to Floridians is Scott’s top priority for, according to House Speaker Will Weatherford, as part of the governor’s $74.2 billion state budget.
“Yes we have some critical needs in education, we have some critical needs in health care,” Weatherford told the News Service, “but before that we’re going to take our first fruits, and we’re going to give it back to the taxpayers.”
The most well received proposals for meeting Scott’s $500 million tax and fee cut challenge:
Vehicle Registration Fee Cutbacks
Rolling back auto registration fees to 2009 levels could save Floridians as much as $401 million a year. Sen. Joe Negron, Senate Appropriations chair, filed a bill (SB 156) to cut back half of the 2009 increases, for a $185 million savings in the next budget year, which would grow to $236.7 million the year after that. Freshman Republican Rep. Mike Hill filed the House companion (HB 61).
Commercial Lease Tax Reductions
Sen. Dorothy Hukill’s rental-tax cut proposal (SB 176) would reduce the state revenues by $235.6 million, with $20.2 million in cuts in the first year. Hukill’s proposal would reduce taxes on leased commercial space by one percent, to six percent overall.
Rep. Greg Steube filed a House bill (HB 11) that would eventually eliminate the commercial lease taxes.
Corporate Income Tax Exemptions
Scott is pushing to increase the corporate income-tax exemptions from $50,000 to $75,000, reducing the overall revenue by $21.6 million the first year, growing to $22.8 million the year after.
Scott is asking for a 10-day back-to-school holiday on clothing under $100, school items that cost less than $15, and computers and other educational electronic equipment costing under $750. Legislators, generally in favor of the idea, have not yet set the length of the break. The holiday would reduce revenues by $60 million, Scott says.
The governor is also asking for 15 days in June for tax-free purchases of hurricane preparation products, reduced to 12 days in a proposal by Sen. Rob Bradley. The 15-day bill would save consumers around $20 million; the 12-day plan would reduce revenues to state and local governments by nearly $3.6 million.
Agriculture Secretary Adam Putnam proposed a new three-day September holiday on the first $1,500 in purchases of Energy Star appliances –items such as washers, refrigerators, and water-conservation gear.
The measures are already incorporated into two business tax-cut bills currently proposed by Sen. Anitere Flores, and Rep. Mike Hill (SB 1076 and HB 899).
Consumers would save about $900,000, says Putnam, while boosting retail sales for the three-day weekend.
Communications Services Tax
Hukill, chair of Senate Finance and Tax, filed a bill (SB 266) that seeks a 2 percent cut to the state portion of the communications services and reduce the overall tax rate to 4.65 percent down from 6.65 percent, and direct-to-home satellite taxes from 10.8 percent to 8.8 percent.
Analysts believe the tax cuts would reduce the state general revenue by $90.8 million in the 2014-15 fiscal years, swelling to $242.1 million. Local governments would a $11.6 million revenue cut the first year, and $31 million in subsequent years.