TALLAHASSEE (CBSMiami.com/NSF) – Governor Rick Scott’s plan to cut corporate taxes had appeared all but dead as members of the Florida Legislature rebelled, but a new plan which seems to have Senate support would let business quintuple a corporate tax deduction to $25 thousand.

The possibility of a corporate tax cut emerged even as other parts of complex budget negotiations reached an impasse.

The new proposal, as outlined by Senate President Mike Haridopolos would increase the exemption that business owners deduct from their tax liability from $5,000 to $25,000.

Haridopolos said the number would roughly halve the number of businesses that pay the corporate income tax and would likely cost between $30 million and $40 million, even as legislator battle for ways to cut a budget badly lacking in revenue.

Governor Scott has made this a key project, and Monday a spokesperson hailed the agreement and said a deal was essentially done with the House.

“Last night business owners were told their tax cuts were dead,” Brian Burgess said in an e-mail. “The Governor stood his ground and just 24 hours later it appears that half of all businesses in Florida will pay no tax at all.

“This will be a huge win for small business owners in Florida and a great first step toward completely phasing out the business tax over seven years,” Burgess said.

The plan is dramatically different than what Scott pitched during the fall campaign, when he pledged to reduce the corporate income tax rate paid by all businesses hit with the tax.

But even as the tax deal seemed within reach, House and Senate leaders traded shots over other portions of the budget negotiations, dimming hopes that the 60-day legislative session would make its scheduled Friday conclusion.

While the size of the difference appeared to be a $150 million sliver of a state budget likely to weigh in around $68 billion, leaders on both sides of the Capitol expressed newfound skepticism that a deal would be done early enough on Tuesday to meet a requirement that lawmakers have 72 hours to read the spending plan before voting.

“It’s going to be a photo finish,” said House Speaker Dean Cannon, R-Winter Park.

Haridopolos seemed to offer even less hope, preemptively defending the second extended session in three years by pointing to the magnitude of the challenges posed by a $3.75 billion budget shortfall. Most of the disagreement now pivots on the health and human services portion of the spending plan.

“In the area probably with the most vulnerable people in the state of Florida, we’re having a heck of a lot of trouble finding the common ground,” Haridopolos said. “The fact that we’re at least temporarily at an impasse, it makes a lot of common sense to me,” he said.

The plan set aside about $150 million less than the House — and about $300 million more than the Senate — for health and human services. Senate negotiators are demanding the House cut its budget, and not cut beyond what the Senate has earmarked for certain programs, before moving on.

The House late last week proposed cutting about $521 million from Medicaid rates for hospitals, while the Senate proposed $438 million in cuts.

The Senate, however, would save $192 million by eliminating hospital payments in the Medically Needy program, which serves people who have costly illnesses but don’t qualify for Medicaid.

The House has refused to cut funding for the program, arguing that it will lead to hospitals getting stuck with providing uncompensated care.


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