Senate approaches tax cuts one piece at a time

  • February 9, 2016
  • /   Jim Turner
  • /   economy

TALLAHASSEE — The Senate, which has yet to settle on a bottom-line figure for tax cuts, continues to review potential revenue reductions one piece at a time.

Senators are looking at the issue as Gov. Rick Scott calls for more than $1 billion in tax cuts. The Senate's approach also is a sharp contrast to the House's wide-ranging, nearly $1 billion tax-cut package, which is scheduled to go to the House floor Wednesday.

Senate Finance and Tax Chairwoman Sen. Dorothy Hukill said reviewing proposed cuts through individual bills gives more lawmakers a say.

"I think our way, while it's much more work, I personally like it better because it's more transparent, because you get to hear how people feel," the Port Orange Republican said.

On Monday, Hukill's committee backed a pair of relatively small cuts that could eventually combine to trim more than $10 million annually in state revenue.

One of the bills (SB 1272) would increase credits available yearly on renewable energy production from $10 million to $15 million. The second measure (SB 844) would lower a 6.9-cents-per-gallon tax imposed on most air carriers for aviation fuel.

The aviation fuel proposal has drawn flak. Despite reducing costs for most commercial air carriers, the measure would increase fees on four carriers — JetBlue Airways, Southwest Airlines, Allegiant Air and Spirit Airlines — that have used an exemption from the tax.

Sen. Anitere Flores, R-Miami, amended the bill Monday — altering the proposed new per-gallon rate — as a way to keep the measure alive until the Appropriations Committee has a better grasp on the budget and how much will be available for tax cuts.

Rather than seeking at least $8 million a year in cuts by lowering the per-gallon rate to 3.3 cents, the proposal now would be at 4.27 cents a gallon in an attempt to avoid affecting the state budget.

"This will be part of those overall discussions," Flores said. "As we come up with a decision as to whether the tax-cut package will be $400 million or a $1 billion, or whatever it is in between, this will be something that will be part of it."

Some of the Senate's other proposed cuts follow the outline offered by Scott, including a 1 percentage point reduction in a sales tax on commercial leases (SB 116) and a move to permanently eliminate a tax on manufacturing equipment (SB 98).

Those proposals, which are included in the House package, await a hearing in the Senate Appropriations Committee. Combined, they would cut state and local revenue by $119.6 million during the next fiscal year. The savings would grow to $363.9 million annually.

The House Finance & Tax Committee last week rolled out a $991.7 million package (HB 7099). Some Democrats walked out of the committee meeting before the vote, even though several expressed support for various aspects of the bill, such a 10-day sales tax "holiday" on school supplies.

For all that is in the House package, it doesn't include Scott's biggest request, the permanent elimination of income taxes on manufacturing and retail businesses, projected as a $770 million hit to state revenue.

"There were some of Gov. Scott's ideas that we were unable to accommodate at this time," House Finance & Tax Chairman Matt Gaetz, R-Fort Walton Beach, said last week. "But hope springs eternal that as we move this legislation forward ultimately to final passage that we'll get even more input from the governor, more input from our colleagues in the Senate, and ultimately pass a $1 billion tax package."

The House package is actually two years of cuts that would provide $353.7 million next fiscal year, which begins July 1, and would top $600 million a year later.

Parts of the House package could have trouble finding Senate support because they were never debated as stand-alone bills in the Senate or the House, Hukill said.

"We try to do that as little as possible," she said. "I would say that much more of what is in their package we've had as a bill, but there is a lot that has never been a bill."

The House proposal, in part, would offer separate sales tax "holidays" on school supplies, personal computers, hunting gear and for small businesses. It also would do such things as lift sales taxes on building materials, pest control and food and drinks sold by veterans' organizations to their members.

But not everything in the House package is a tax cut.

The House plan, for example, would expand the eligibility of property appraisers in rural communities to qualify for state assistance to pay for aerial photography. Also, it would allow coastal counties to divert some locally generated tourist-development "bed tax" dollars to pay for law enforcement and other first-responder needs linked to tourism.

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