Gov. Scott’s Corporate Tax Cut Proposal Shelved
TALLASSEE (CBS4) – The future of Governor Rick Scott’s signature corporate tax cut proposal is in doubt after leading senators sent mixed signals and a skittish committee temporarily postponed consideration of the measure at its last scheduled meeting on Monday.
Sen. Garrett Richter, R-Naples, asked the Senate Commerce and Tourism Committee to shelve the latest version of the proposal, at least for now, amid concerns on the panel about hearing an extensive amendment to the bill (SB 1236) shortly after it was proposed.
Committee Chairwoman Nancy Detert said after the meeting that the measure is dead “in its current iteration,” but other bills currently moving through the process could provide a vehicle for the tax cut.
Speaking to reporters afterwards, Richter sounded skeptical the measure would be approved.
“I’m not ready to throw the towel in,” he said, “but I’m a realist, and we’re running out of time.”
Senate Budget Chairman J.D. Alexander, R-Lake Wales, also said the tax cut was unlikely to pass this session.
“Until we (adjourn) sine die, everything is in the air,” Alexander said. “I think its prospects aren’t great.”
But Senate President Mike Haridopolos, R-Merritt Island, said the proposal is “definitely still alive” and praised Richter’s latest amendment, offered at Scott’s request, to peg at least some reductions in the corporate tax to increasing sales tax revenues.
“We want to understand the specifics,” Haridopolos said. “I think the governor has a good idea of a formula. We do not want to lock ourselves into an automatic situation. We want to allow it to have some flexibility.”
Haridopolos said the corporate tax could be considered as part of negotiations over the budget for the coming fiscal year, which begins July 1.
Despite the scrambled signals, Scott’s office said he still believed the chamber would approve the proposal, one of the hallmark pieces of the new governor’s economic plan during last fall’s election.
“The governor is confident that the Senate, whose leaders have described themselves as the most conservative Senate in Florida history, will pass his business tax cuts, which are the centerpiece of his plan to turn Florida’s economy around,” spokesman Brian Burgess said in an email.
Under the amendment Richter offered Monday, the corporate tax would have fallen from 5.5 percent to 4.5 percent on Jan. 1. Future reductions would have been based on the growth in sales tax beyond a benchmark set by a complex formula accounting for population increases, inflation and the tax’s normal growth.
The measure would have used credits against the state’s tobacco tax to replace money drained away from the state’s voucher system, which is currently backed by corporate tax credits.
But the committee balked at voting on the amendment, which was filed Friday.
“We could have even had the votes to pass it, but frankly I don’t think we want to pass it unless we’re clear about what it is we’re passing,” Detert said afterwards. “We want to be supportive of the governor’s top priority, but we want to make sure that we understand what it is that we’re passing. And when a strike-all was submitted on Friday and today is 8 a.m. on Monday, I don’t think you rush a bill that’s hundreds of millions of dollars.”
In addition to the short notice on the amendment, senators seemed concerned at a price tag that committee staff estimated at $333 million for the coming fiscal year, even as a budget gap forces deep cuts in education and health care.
“I don’t think we’re ready to look for another $333 million this week,” Detert said.
Speaking to reporters following the meeting, Richter wouldn’t rule out dropping the immediate 1-percent cut and rolling it into the formula.
“That may be a consideration as we try to put together a piece of legislation that meets the governor’s strong desire to eventually eliminate the corporate income tax, and one [under which] the state can conduct its budget and meet its budgetary components responsibly,” he said.
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