Senate committee approves tax breaks for businesses

Mar 8, 2012

Lawmakers are considering a tax package that would grant almost $120 million  each year in tax breaks to businesses and consumers in the state. Regan McCarthy reports the Senate Budget Committee approved the measure Wednesday in an unusual late-late session committee meeting.

Senate Budget Chairman JD Alexander says House leaders have already agreed on the measure, which would grant millions of dollars in tax breaks, mostly for businesses.

“This represents a compromise between the House and the Senate on what the tax package would look like.”

Alexander, a Republican from Lake Wales, says the proposal includes tax breaks for aircraft engine makers, and phosphate miners. It would increase the corporate income tax exemption from 25-thousand to 50-thousand dollars and contains a proposal that would give a sales tax exemption for the electricity used in packing houses for fresh fruit and meats. Senator Gary Siplin, a Democrat from Orlando says that’s a particularly important provision.

“There’s no packing house of significance in the State of Florida. We have to ship our cattle out. And as opposed to doing that we want to keep our cattle in house in the state of Florida so we can get the benefits of that. And in addition to that there are citrus packing houses that are closing down because of excess cost in terms of electricity.”

Siplin says the provision would not only save jobs, but could add jobs in the state. He says there’s a packing plant that’s interested in opening in Florida.

“We’ve identified a major packing house that’s already made major investments in Ocala to take advantage of this opportunity.”

One item the measure does not include is a provision that would require state agencies and universities to give preference to Florida businesses when letting contracts for things like printer services. It’s a move supported by Senator Ellyn Bogdanoff, a Republican from Fort Lauderdale, who says it would create jobs.

“There’s one particular, I would say fact pattern, where we actually lost a state contract to a relatively large Jacksonville printer and it went out of the state to Tennessee for maybe under $500  because it was cheaper. And this was a million dollar contract. So the Jacksonville printer lost the million dollar contract for less than 500 dollars. And guess what. Tennessee has a local preference. So if it was a Tennessee printer bidding in Tennessee they would have kept that business there.”              

But Alexander says adding that language could jeopardize the package as a whole making it through the House. And Senator Evelyn Lynn, a Republican from Daytona Beach, says that’s worth noting.

“The problem is we are very close to the end of session. This is one thing we would throw back into the pot during, I think it’s been a very challenging negotiating year.”

Meanwhile, Lawmakers like Senator Bill Montford, a Democrat from Tallahassee, say they like the idea, but wonder if there’s a way to know it works.

“I support the process that we’re going though in terms of trying to aid business and getting more jobs. The question I have though is what point and how is the process in terms of getting a report back, Do we in a year or two years, will somebody come back and say the decisions that we made this session produced x number of jobs and businesses and so on. In other words, in this age of accountability, how do we know that what we’re doing now worked?”

Senator Don Gaetz, a Republican from Destin, says the state is creating a website that lists all of Florida’s economic development incentives, who receives them and what the outcome is. Gaetz says that same idea could be applied to tax incentives.

“We need to make sure we are getting full change for our money and Senator Sobel has led us in that direction with economic development programs. I’m sure we can do the same as far as tax incentives are concerned.”

The tax break proposal falls in line with suggestions organizations like the James Madison Institute have made for returning state dollars to the private sector. Bob McClure is the institute President .

“All government has is the money it takes from tax payers, so to the extend we can leave dollars in the hand of tax payers, in the wallets of tax payers who can then spend more money at the grocery store,  buy a new car, fix an old car, grow their businesses, whatever the case may be. That is, we would argue the proper role of government. Government doesn’t create jobs. It creates a climate where job growth can occur.”

But Florida Association for Retired Americans advocate Barbara Devane says the tax breaks won’t do much to help the average Floridian.

“This state has had a shifting of the money to give breaks to the richest one percent, and big corporations and at the same time they’re up there right now in the budget process cutting, cutting, cutting programs that would help our retirees and all the citizens of Florida.”

Devane says she supports a tax reform that increases revenue so there’s money to fund programs that help people. The tax break measure passed out of the Senate Budget Committee. It’s now on the Senate’s special order calendar for Friday.