House Lawmakers Begin Discussions On Tax Cuts

Feb 4, 2015

FL House Finance & Tax Committee
Credit Nick Evans

Florida Gov. Rick Scott is touring the state in support of his plan to cut cable and cellphone taxes.  He’s finding support in the statehouse but some lawmakers would prefer more targeted tax breaks.

The Governor is making noise about a proposal to lower Floridians’ taxes by more than $600 million.  The response from Matt Gaetz (R-Fort Walton Beach) chair of the House Finance and Tax committee is effusive.

“Well I am inspired by the Governor’s enthusiasm to cut taxes,” Gaetz says.  “He’s making good on a campaign promise to give the Legislature the opportunity to cut more than a billion dollars in taxes over the next two years.”

The largest chunk of Scott’s tax cut, and the part he’s promoting most heavily from the stump, has to do with taxes on things like cable and cell phones.  Scott says for every $100 Floridians pay in monthly cable or cell phone bill, they’ll keep $43—he’s even set up an online calculator so people can see exactly how much they’ll save.  But the $43 in Scott’s example, or whatever the amount the calculator spits out for an individual, is how much they’ll keep annually.  For someone spending $100 a month, the bill would only drop to about $96.40. 

And this has some lawmakers wondering about return on investment.

“I’m for any type of tax cut.  I just am,” Rep. Mike Hill (R-Pensacola) says.  He sits on the committee with Gaetz. 

But while he thinks the Governor’s tax cut is good idea, he says there are better options available.

“If this is going to be competing against the commercial lease tax which could have, I think, a bigger impact on Florida in terms of bringing businesses and jobs here, if we had to choose between the two, I would prefer the commercial lease tax over reduction of the communication sales tax,” Hill says.

Florida levies a 6 percent tax on commercial leases and the House committee discussed various ways of lowering it to 5 percent.  A similar plan died in the last legislative session, and the Governor has not included the idea in his new budget. 

Still, Hill thinks lowering the rate will help Florida businesses expand, and make it easier to attract new ones.  But both proposals are expensive:  Gov. Scott’s communication sales tax reduction runs about $470 million while a one percent commercial lease tax reduction would cost more than $200 million. 

It’s unlikely the Legislature will be able to fund both cuts as they are currently packaged, so in the coming weeks they may have to decide which is the better of two approaches:  a broad but thin tax break that saves everyone a small amount of money, or a narrow, targeted cut that will only benefits a specific class of businesses.