Lawmakers Look To Balance Tax Cuts and Incentives
Florida Governor Rick Scott wants to find more ways to grow jobs in Florida and he looks to be turning to money for an answer. Regan McCarthy reports the governor is proposing 1-billion dollars in tax cuts, and 250-million dollars for economic incentives.
Given the Governor’s unyielding focus on job, it shouldn’t come as a surprise that a significant chunk of the breaks Scott is pushing in his 1-billion dollar tax cut proposal would benefit the business sector. Scott’s proposal includes permanently getting rid of sales taxes on manufacturing equipment and machinery, getting rid of the income tax for businesses and manufacturers, and a plan to reduce the commercial lease tax. Sen. Dorothy Hukill (R-Port Orange) is currently marshaling it through the legislature.
“This affects every business that leases commercial space and is a tax on them every month that they pay for their rental space,” Hukill says.
And that’s not the only measure from Scott’s proposal Hukill is pushing. This one more likely to have an impact on the average Floridian. She's also behind a sales tax holiday.
"It’s like last year’s bill: clothing items that cost $100 or less, school supplies that cost $15 or less, the first $750 on a personal computer and related accessories," Hukill says.
In years past, individual tax measures have been rolled into larger pieces of legislation and Hukill says she expects that’ll be the case again this year.
“So while we do not know what the final tax bill will look like at this time, how much money and what’s included, although we’ve heard some statements from leadership, my position is to get the bills into Appropriations so that they are in play and can be considered in any tax bill,” Hukill says.
Meanwhile, Senate President Andy Gardiner says a billion dollars in tax cuts sounds great, but it’s a revenue reduction the state will have to balance.
“We love the idea of cutting as much taxes as we can. We want to cut taxes. I think you’ll see from us that we need to see the other areas of the budget. We need to understand what’s being proposed. We know the governor is talking about EFI at $250 million. At the top of our list is going to be the tax cuts certainly. But we’ve just got to figure that balance,” Gardiner says
EFI or Enterprise Florida Inc. is the state’s economic development arm. Scott is proposing a $250-million bank account for the group that would let it offer incentives to attract business and encourage job growth in the state. Enterprise Florida’s incentive programs have come under fire lately from lawmakers who question the way the group has handled its money and whether incentives are providing a big enough bang for the state’s buck. Enterprise Florida Executive Vice President Crystal Sircy says her group has listened to concerns raised by lawmakers and has a plan.
“Those reforms include addressing the issue of reverted fund. We’ve had a lot of discussion about funds that have reverted. We’ve addressed that in the plan. Secondly, eliminating the escrow account. Again, we’ve had sidebar conversations about that escrow account and this plan eliminates it all together for new commitments,” Sircy says.
The plan also includes a streamlined approval process. But despite the added protections, some lawmakers like Sen. Jeff Brandes (R-St. Petersburg) question whether both incentives and tax cuts are needed.
“Why not just reduce sales tax on manufacturing products and make that permanent? I think my business wants permanent tax cuts more than it wants targeted incentives that may cause me to pay higher taxes because my business has been around 60 years so that you can attract more of my competitors to the market place,” Brandes says.
But Sircy maintains those incentives are needed to attract what she calls competitive projects and she says she’s heard first hand incentives do make a difference in whether a company decides to move to or grow in Florida.