Florida House moving forward with tax-cut package

House Ways & Means Chairman Bryan Avila (News Service of Florida)

TALLAHASSEE, Fla. – A wide-ranging tax package moved forward Wednesday in the House, despite concerns small airports could be hurt, local tourist dollars would be diluted and corporations would be the biggest beneficiaries.

The Ways & Means Committee approved the package (PCB WMC 20-01), which features sales-tax breaks before hurricane season and the new school year, while trimming taxes on commercial leases and cell phones and other communications services.

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It also calls for increasing a refund on aviation-fuel taxes, eliminating an unused pool of money for professional sports stadiums, expanding a tax-distribution requirement about charter schools, and adding water infrastructure projects to the list of allowed uses for local tourist- development dollars.

The proposal is expected to see some changes before the House negotiates with the Senate on a final package.

“This is the residents’ money,” Ways & Means Chairman Bryan Avila, R-Miami Springs, said after the meeting. “Quite frankly, I am of the opinion that they know how to spend their money better than we do.”

Rep. Mike Caruso, R-Delray Beach, said a goal should be to eliminate the commercial-lease tax on small businesses and to consider lifting sales taxes on textbooks for public schools.

However, the package, offering an estimated $109.3 million in tax reductions for next fiscal year, drew opposition from Democrats seeking changes to the state’s tax structure and from groups tied to tourism and aviation.

Samantha Padgett, general counsel of the Florida Restaurant & Lodging Association, agreed on the need to protect water bodies. But she expressed concern that in directing money to those efforts, lawmakers would continue to find alternative uses for local tourist-development tax dollars.

“Over the years, we’ve seen that sole purpose be whittled away and reduced for different purposes,” Padgett said. “And our concern is that eventually the exceptions will consume all available funds.”

The package would expand the use of the tourism dollars for seagrass removal, flood mitigation, algae cleanup and some septic-to-sewer conversion projects.

Avila said a lack of clean waters will harm tourism.

“I haven’t been to a beach in Miami-Dade in four years. And it’s not because of time, but more so just because I don’t know what is in the water,” Avila said. “And that is something that obviously is very harmful to the local economy.”

Lisa Waters, president and CEO of the Florida Airports Council, said a reduction in a tax on aviation fuel would disproportionately affect rural communities and small airports not served by air carriers. It would reduce money available to the Aviation Trust Fund, which is used to match federal dollars for local projects.

“We did some analysis on airfares, and a reduction on the fuel tax has no impact on airfares domestically in the United States,” Waters said.

The package would provide a $3.6 million reduction in state and local revenue through the aviation fuel proposal. It would expand a refund now available on the 4.27-cent-per-gallon excise tax on aviation fuel. The refund in the package would go from 1.42 cents per gallon to 2.38 cents per gallon.

More broadly, Rich Templin, a lobbyist for the Florida AFL-CIO, questioned the need for what has become an annual tax package when the state faces numerous issues with about 45 percent of its households deemed “working poor.”

“Florida has a lot of problems that are often not brought into these rooms, and a big part of some of that is because we lack the revenue to address some of these in creative ways,” Templin said. “Part of that is because we use non-recurring revenue, and then we roll out a tax-cut bill that cuts recurring revenue, and those are permanent … so we have a hole, right, and instead of using additional resources from the year before to fill that hole, we use it as a justification to dig that hole even deeper.”

The largest part of the package is a proposed three-day back-to-school tax “holiday” in August. It would allow shoppers to avoid paying sales taxes on clothes that cost $60 or less, school supplies that cost $15 or less and the first $1,000 of the cost of personal computers. The proposal is projected to save shoppers $41.8 million.

A seven-day disaster-relief tax “holiday” at the end of May would allow people to avoid sales taxes when buying items ranging from batteries to portable generators, totaling a projected $5.6 million tax reduction.

The Senate has not proposed a tax package but is advancing a series of individual tax bills. That includes a bill (SB 524) that would provide an 18-day “disaster preparedness” tax holiday before the hurricane season and a 10-day back-to-school holiday period in July (SB 542).

The House’s second largest projected savings, $24.9 million, would come through a 0.5 percentage-point reduction in the communications services tax, which is collected on such things as cell phones and cable and satellite television.

A proposal to cut a sales tax on commercial leases by 0.1 percentage point, to 5.4 percent, would generate a $15.8 million savings next fiscal year. The commercial-lease tax has been a longtime target of business leaders.

Through voice votes, the committee rejected a series of Democratic amendments, including one that sought to eliminate a corporate income-tax “loophole” that allows companies to save about $400 million a year.

Amendment sponsor Anna Eskamani, D-Orlando, said in-state businesses are at a disadvantage under the current tax structure.

“Right now, the current scheme picks winners and losers,” Eskamani said. “The biggest corporations, that top 1 percent that have the army of attorneys and accountants and resources, get to fit into the current legal structure to find loopholes and they do it very, very well.”

But Republicans said the current tax structure has helped draw people and corporations to Florida.

Rep. Scott Plakon, R-Longwood, said businesses come to Florida to make money, and the proposal would create uncertainty.

“Capital will flow where it is treated best,” Plakon said.


About the Author

Jim is a Capitol reporter for the News Service of Florida, providing coverage on issues ranging from transportation and the environment to Legislative and Cabinet politics.

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