House Tax-Cut Package: Too Much Or Not Enough?
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TALLAHASSEE (NSF) – Several House Democrats expressed apprehension Wednesday about a nearly $1 billion tax-cut package that Republican leaders unveiled this week.
But some of the same members also pitched additional items --- lifting the sales tax on bear-proof trash cans and gym memberships --- that they'd like added to the diverse package, which is expected to swell to more than $1 billion as it advances in the coming weeks.
House Finance & Tax Chairman Matt Gaetz, R-Fort Walton Beach, brought a draft of the business-backed package before his committee Wednesday. No vote was taken.
The package nearly matches the $1 billion in tax cuts that Gov. Rick Scott has sought, though it includes less permanent, or recurring, cuts than Scott proposed. It would meet Scott's call for a 1 percentage-point reduction in a tax on commercial leases starting July 1, 2017 and would permanently eliminate a tax on manufacturing machinery that is set to return in 2017.
Rep. Lori Berman, D-Lantana, expressed concern with the $1 billion figure, as state revenue projections have changed.
"I do think it's quite a lot of money, and I think we have to balance this against making sure we're funding our education, our health care, our safety," Berman said.
Last week, state economic forecasters slashed nearly $400 million from their estimate of how much lawmakers will have to spend in the budget year that begins July 1, raising questions about Scott's plans to cut taxes and boost economic-development incentives.
Gaetz said while he shared Berman's "caution," he views past cuts as having helped the growth of the state's economy, which has seen tourism and home building grow the past six years.
"We do continue to cut taxes, we continue to be aggressive in cutting taxes, by $1 billion, but we do so within this tax package for finite periods of time, so that if the revenue position does change, or oscillate, or dip, that we have the opportunity to have that revenue to come back into the picture," Gaetz said. "But for now I want to put $1 billion back into the pockets of Floridians because I think that is the best way to stave off some of the leveling we see in this state."
Tax cuts are one of Scott's two priorities for the session, along with $250 million for business recruitment incentives. The Senate is advancing $250 million in incentives.
The House package doesn't go along with Scott's request for a permanent elimination of the corporate income tax on manufacturers and retailers, projected as a $770 million annual reduction in state revenue.
Even with the broad nature of the House plan, Rep. Jared Moskowitz, D-Coral Springs, said lawmakers shouldn't put "all of our eggs in one basket because it's an election year."
"Last year we cut $600 million and change, this year we jumped to $1 billion. Next year what is the number?" Moskowitz said. "At some point in time, you're not going to be able to continue to increase and then we're going to be disappointed and it's going to look like failure."
At the same time, Moskowitz said the plan could lift sales taxes on bear-resistant trash cans. Scott has called for lawmakers to budget $230,000 for bear-resistant trash cans and outreach programs to reduce conflicts between humans and bears.
"Just because we might decrease a bear population doesn't mean one bear can't wander into a neighborhood," Moskowitz said.
The House plan would give Scott a one-year sales-tax exemption on college textbooks and a 10-day sales tax "holiday" on back-to-school items.
Expanding upon Scott's proposals, the House package also includes a sales-tax holiday for items costing less than $1,000 at certain small businesses the Saturday after Thanksgiving. It also would provide a tax holiday for hunting and fishing gear on a single day in August, and for personal computers and computer-related accessories for a day in April 2017 deemed the "technology" holiday.
The holiday on fishing and hunting equipment was part of an initial $690 million House tax-cut proposal last year. Scott eventually signed a tax cut plan worth more than $400 million over two years that featured reductions in taxes on cell-phone bills, cable-TV bills, gun-club memberships, college textbooks and luxury boat repairs.
The House is also reviving other measures that failed to advance in 2015, such as lifting sales taxes at school book fairs for one year. Among other things, the measure would lift sales taxes on building materials, pest control and food and drink sold by veterans' organizations to their members.
Rep. Jose Javier Rodriguez, D-Miami, suggested the House could promote the package on social media with a hashtag "mostly special interest giveaways but some stuff for the people."
Gaetz preferred the line "the rent is too damn high," but said that has been rejected by House leadership.
Last year the House promoted its tax cuts under the tag "No tax is safe."
The News Service of Florida's Jim Turner contributed to this report.
