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Senate looking to cut motorist fees cranked up in recession

by John Kennedy | March 21st, 2013

Senate Budget Chairman Joe Negron said Thursday he wants to end a longtime tax credit for the insurance industry and use $220 million in savings to reduce motorist fees jacked up in 2009.

The proposal came after Negron’s budget committee spent weeks reviewing tax and spending policies. When the panel unearthed a 1987 credit given Florida insurance companies for the salaries they pay employees, Negron saw green.

The 15 percent tax credit was aimed at giving insurers an incentive to open offices in Florida. But Negron said the industry now looks “robust.”

By eliminating the credit, lawmakers could free money that could be used to reduce driver’s license and registration fees enacted by lawmakers scrambling to close budget holes at the height of the recession.

“I’d rather send this money back to them,” Negron told the Senate budget panel. He said legislation would be ready next week for the committee to review.

Mark Delegal, who lobbies for State Farm and other insurers, said the move was a surprise to many in the industry. He cautioned that eliminating the tax credit could make some companies reluctant to hire or keep operations in Florida.

“Companies are always looking to consolidate costs and they consider a lot of things when moving an operation to Jacksonville or somewhere else in Florida,” he said.

Lawmakers struggled in 2009 to balance the recession-ravaged state budget. Motorists took a hit, when lawmakers agreed to boost the cost of renewing a license from $20 to $48. First-time licenses went up to $48 from $27. Registering a car went from $100 to $225 that year.

Negron said the $220 million in savings the state would earn by erasing the credit would allow lawmakers to cut the 2009 increases by half.

“Over time, I hope we can eliminate that fee increase,” he said.

Sen. John Thrasher, R-St. Augustine, said, “If we have the funds and we can return it to the people, I applaud you.”

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