TALLAHASSEE (NSF) – The House has positioned its dramatically streamlined tax-cut package for a vote on Friday.
But it remains to be seen how the Senate, which has offered four individual tax-cut bills during the ongoing special legislative session, will handle the House proposal.
Katie Betta, spokeswoman for Senate President Andy Gardner, would only say Thursday that the Senate’s Finance and Tax Committee is “likely” to meet the final week of the special session. The session started Monday and could last through June 20.
The House tax-cut package (HB 33A), stripped down as lawmakers work to cover health-care costs in the overall budget, offers $273.2 million in savings for the upcoming fiscal year, with the number growing to $436 million the following year.
The overall numbers are down from a $690 million plan (HB 7141) that had been proposed by the House during this spring’s regular legislative session and the $673 million in cuts requested by Gov. Rick Scott.
“I believe this is reasonable, given the economic climate we find ourselves in,” said House Finance & Tax Chairman Matt Gaetz, a Fort Walton Beach Republican who authored the bill.
Democrats proposed several changes to the tax cuts Thursday, though they withdrew most of the proposals before votes could be taken. They were unable to alter the package that was rolled out of the Finance & Tax Committee on Tuesday.
“What was frustrating, in the tax plan they found a way to increase a tax (cut) to businesses, but didn’t increase the benefit for students,” Rep. Alan Williams, D-Tallahassee, said.
Since the regular session, the House increased a proposed reduction in a sales tax on commercial real-estate leases. The proposal is now expected to provide an overall $44.2 million in savings.
Still, the largest part of the package — a cut in the communication-services tax on cable-TV and cell-phone services — is also the portion that has taken the biggest hit since the regular session.
Once proposed as a 3.6 percentage-point reduction, which would have provided about a $40 a year in savings for Floridians who pay $100 a month for cable-TV and cell-phone services, the communications-services tax is now proposed to drop 0.9 percentage points. The new rate would provide about $10 a year in savings on a $100 monthly bill.
Responding to questions from Democrats, Gaetz said the tax cuts are designed to help a broad range of Floridians, regardless of the overall savings.
“The goal is not to say that $10 or $20 is going to fundamentally, in some earth-shattering way, change the economic climate of the state of Florida,” Gaetz said. “But it might just mean a little something extra for the poor folks that we represent and the working class who need a little extra at their kitchen table.”
Instead of an overall savings once projected at more than $400 million next fiscal year, the reduction in the communications-services tax would now reduce state revenue during the 2015-16 year by about $78.4 million, according to state economists.
Democrats withdrew amendments to maintain the communications-services tax at the current rates as a way to free up money to give state employees pay raises and to create a sales-tax holiday on items purchased at the Florida Historic Capitol and Capitol Building gift shops.
In a mostly party-line vote, the House rejected, 71-29, an amendment by Williams that would have expanded the proposed back-to-school sales-tax holiday from three days to two weeks.
“We come up here and we talk about let’s do all we can for schools, let’s do all we can for our kids, let’s do all we can for families, this is it, this is the opportunity,” Williams said.
The sales-tax holiday is proposed in the bill to last from Aug. 7 to Aug. 9, eliminating sales taxes on certain clothing under $100, school supplies valued under $15, and the first $750 on the cost of personal computers and accessories.
The tax-cut package includes a couple of other sales-tax holidays.
One would be for small businesses on the Saturday after Thanksgiving as an alternative to the Black Friday sales offered mostly by big box stores.
The package also would offer a trio of single-day tax holidays on college textbooks, timed with the start of the upcoming fall, spring and summer semesters.
Scott had proposed the sales tax on textbooks be permanently lifted.
The measure also would eliminate taxes on admissions and membership fees for gun clubs, certain farm and irrigation equipment, food and beverages sold in support of school extracurricular activities, recycling machinery, and motor vehicles purchased overseas by internationally deployed service members from Florida.
The package would provide refunds or credits from the state’s 6.9 percent excise tax on fuel to flight schools run by Florida-based colleges and aeronautical schools.
The House plan also would eliminate Florida’s estate tax, increase property-tax exemptions for residents who are widows, widowers, blind, or totally and permanently disabled, and provide more tax credits for businesses involved in Brownfields cleanup and for research and development.
Also, cider made from pears would be reclassified from wine to a malt beverage, which would reduce a tax on pear-cider production from $2.25 a gallon to 89 cents a gallon. Cider fermented by apples is already taxed at the lower rate.
The tax also expands a property-tax exemption for service members when deployed outside the continental U.S. to include the following ongoing military operations: Joint Guardian, Octave Shield, Trans-Sahara Counterterrorism Partnership, Nomad Shadow, U.S. Airstrikes Al Qaeda in Somalia, Objective Voice, Georgia Deployment Program, Copper Dune, Observant Compass, Juniper Shield and Inherent Resolve.
The News Service of Florida’s Jim Turner contributed to this report.