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Scott pitches big tax cuts amid tight budget

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TALLAHASSEE, Fla. – Despite a tight budget environment that will leave little room for extra spending, Gov. Rick Scott launched a media blitz Wednesday as he challenged lawmakers to slash taxes by $618 million.

Scott launched his "Fighting for Florida's Future" Tax Cut Tour in Jacksonville, the first of six stops planned as he pushes for reductions in a tax on commercial leases, sales-tax "holidays" for consumers and a modest reduction in the state's corporate income tax.

In remarks unveiling the proposed tax cuts, Scott suggested that lawmakers who had campaigned on calls for smaller government should rally behind his package.

"Most people, when they run for office, they always talk about how they want to reduce taxes. This is their chance," Scott said.

But Scott used a narrow reading of a forecast of state revenues to make his case that the Legislature could afford the tax cuts. That raised questions about how easily the proposals could be sold to lawmakers already thinking small about the budget year that begins July 1.

The largest portion of Scott's proposal would reduce a sales tax on business leases by $454 million, cutting the tax by 25 percent. Scott noted that Florida is the only state with such a tax.

Scott would also offer a series of sales-tax holidays at a cost of $98 million. The biggest-ticket holiday, at $72 million, would provide a 10-day period when Floridians could make back-to-school purchases without paying sales taxes.

Another $51 million proposal would go toward tax breaks on books, the majority of it providing for a sales-tax exemption for college textbooks. The rest would be devoted to an exemption for book fairs.

Also, Scott would raise the exemption on the corporate income tax from $50,000 to $75,000 --- at a total cost to the state of $15 million. After the increase in the exemption, the third of Scott's tenure, more than 80 percent of the state's businesses would not owe corporate income taxes, according to the governor's office.

Business groups quickly endorsed the package. Randy Miller, the president and CEO of the Florida Retail Federation, said his organization "is excited about what the governor's tax cut package will mean for growing Sunshine State businesses, creating new jobs for Florida families and ensuring our state remains competitive."

Legislative leaders were more measured. Through a spokesman, House Speaker Richard Corcoran, R-Land O' Lakes, issued a terse statement about the proposal.

"All of us in the House look forward to working with Governor Scott to provide tax relief to the people of Florida," Corcoran said.

A spokeswoman for Senate President Joe Negron said Scott's proposals would be weighed along other ideas for tax relief.

"The Senate president gives great consideration to any proposal put forward by Governor Scott," the spokeswoman said in an email. "In the coming weeks, Senate committees will discuss a broad range of tax cut options, including those outlined today by Governor Scott."

Lawmakers have cautioned that budget-writers will need to be careful with the spending plan for next year, given that the state's financial picture is tightening. Corcoran has gone as far as to say that when all factors are accounted for, the Legislature might face a shortfall by the time it returns to session March 7.

Scott pushed back on that narrative, emphasizing that the state will bring in $2.8 billion more in the coming budget year than it will face in year-to-year expenses.

"We have plenty of revenues. ... So we've got to spend our dollars well," he said.

But Scott's figure excludes expected increases in funding for education and health care, some of it driven by an increased demand for state services.

A three-year forecast of state revenues prepared this summer said the state's surplus would likely only amount to about $7.5 million, though economists later added about $141.9 million to their estimate of general revenues. The forecast accounts for a three-year average of tax cuts approved by lawmakers, but that number would be far exceeded by Scott's lease-tax proposal alone.

Legislative leaders also are troubled by the forecast's predictions about the future, with a shortfall of $1.3 billion projected the year after next and a gap between expected revenues and spending of nearly $1.9 billion in the third year of the forecast.