Negron doesn’t buy insurers ‘apocalypse’ claims, meaning tax break may be doomedby John Kennedy | March 28th, 2013
When Senate budget chief Joe Negron rolled out a plan last week to eliminate a longtime tax break for the insurance industry and use the savings to reduce motorist fees, insurers were caught by surprise.
By Thursday, the industry had reloaded — with insurance lobbyists lining up to plead with Negron’s Appropriations Committee to drop the plan. Several raised the possbility of insurers choosing to locate offices outside of Florida, if the incentive is lost.
In the end, the bill (SPB 7132) sailed 19-0.
Insurance representatives told senators that companies had created 44,000 jobs in Florida since 2008 — even while the state was rocked by high unemployment. They also boasted that insurers were financially strong and paid claims on time.
“But the repeal of this will have an impact,” said Paul Sanford, lobbyist for the Florida Insurance Council.
Negron wants to repeal a tax incentive on the books since 1987, which gives insurers a credit on the insurance premium tax for 15 percent of the salaries paid employees in Florida. Negron said $220 million earned through the repeal would be used to reduce motorist fees boosted in 2009 when lawmakers were scrambling to patch budget holes.
The increases were part of a $2.2 billion package of tax and fee hikes that included an increase in the state’s cigarette tax.
Negron said industry statements about the strength of the industry help make his case that the tax break is no longer needed.
“For every person who is paying less in taxes, someone is paying more,” Negron said, adding, “State Farm in 2012 had a net income of $3.2 billion. The CEO had a good year, which he deserved….he made $9.6 million. Allstate had $2.3 billion in net income for 2012. I’m happy about that. That’s a good thing. That means they’re solvent and they’ll pay claims.
“But this idea that if we decide to redeploy a tax incentive to our constituents that the apocalypse is going to occur, I don’t think the facts support that,” he concluded.