Florida legislative tax cut proposals have big differences
Special Report from Florida TaxWatch
The competing House and Senate tax cut proposals have many differences that need to be worked out, but there are beneficial provisions in both plans, according to a report from Florida TaxWatch. The independent, nonpartisan, nonprofit government watchdog group's new report, Comparing the House, Senate and Governor Tax Cut Proposals, compares the three proposals suggested by the Florida House, Senate and Governor Rick Scott to provide $500 million in tax cuts during the 2014 Legislative Session. The report notes that both the House and the Senate have some room to add cuts to meet the $500 million goal that was set by the Governor and embraced by the Legislature.
"Floridians can expect some tax relief in 2014, and the Governor and Legislature should be commended for that," said Dominic M. Calabro, President and CEO of Florida TaxWatch. "As the details are finalized, lawmakers should consider the most broad-based relief options to benefit all Florida taxpayers."
One proposal to reduce vehicle registration fees already passed the House and Senate with bi-cameral support. [Editor's note, Gov. Rick Scott just signed this bill into law.] The reduced vehicle registration fees will save Florida drivers up to $25 per vehicle, resulting in savings of $307.2 million next year and $394.5 annually.
"Now that the economy is improving, reducing the motor vehicle fees that were increased to balance the budget during the recession makes sense," said Kurt Wenner, Vice President for Tax Research at Florida TaxWatch.
The current tax cut proposal from the Florida House of Representatives has $447.4 million in recurring savings, while the Florida Senate proposal contains $474.7 million. State revenues would be reduced in the upcoming budget year by $343.4 million and $365.7 million in the House and Senate plans, respectively, as a result of the tax cuts.
The Senate package contains only two proposals in addition to the vehicle registration rollbacks. They have included a three day "back to school" sales tax holiday and a reduction in the Communications Services Tax, strongly supported by Florida TaxWatch in the report.
"TaxWatch encourages the House and Senate to work together to more aggressively reduce the Communications Services Tax," added Calabro. "As a state with the fourth-highest Communications Services Tax in the nation, Florida lawmakers should first look to lower this regressive tax that is an impediment to bushiness and families in the Sunshine State."
The House package contains four sales tax holidays, including a slightly larger "back to school" holiday compared to the Senate proposal. The House also includes tax credits and exemptions, including one proposed by the Governor to reduce the corporate income tax exemption.
Only two of the proposals advanced by Governor Scott are excluded from either chamber's tax cut proposals. Neither the House nor the Senate are considering reducing the sales tax on commercial rents or lowering corporate filing fees.
In the report, Florida TaxWatch also encourages the Legislature to limit local member projects and pass more of the savings from the more than $1billion budget surplus on to Florida taxpayers.
"The Legislature should weigh the benefits of funding projects that benefit a small part of the state against the value of providing tax cuts that benefit the majority of Floridians," added Wenner. "The Legislature should be applauded for returning money to the taxpayers, but TaxWatch encourages them to look for more opportunities to share these savings with hard-working Floridians."
Florida TaxWatch is a statewide, non-profit, non-partisan research institute that over its 33-year history has become widely recognized as the watchdog of citizens' hard-earned tax dollars. Its mission is to provide the citizens of Florida and public officials with high quality, independent research and education on government revenues, expenditures, taxation, public policies and programs and to increase the productivity and accountability of Florida state and local government. Its support comes from homeowners and retirees, small and large businesses, philanthropic foundations, and professional associations. On the web at www.FloridaTaxWatch.org.