Senate rolls back vehicle fees, nixes insurance industry tax breakby Dara Kam | April 24th, 2013
Florida vehicle registration renewal fees would be rolled back – a savings of about $12 for drivers – under a measure unanimously approved by the state Senate this morning.
The state would make up the lost money – between $220 million and $230 million – by doing away with a decades-old tax break to insurance companies. Insurers who pay a state tax on insurance premiums get a rebate worth 15 percent of the salary paid to their workers.
Senate budget chief Joe Negron, who hatched the plan, told the chamber that insurance companies have prospered in Florida since the 1987 tax break went into effect. Lawmakers hiked the vehicle fees in 2009 as part of a budget-cutting exercise prompted by a prolonged dip in the state’s revenue collections. But the state’s financial situation is more robust this year, and lawmakers for the first time in several years have more money to spend.
The proposal makes a number of reductions in fees or taxes on vehicles, including:
_ Cuts $5 tax on new vehicle registrations in half to $2.50;
_ Decreases from $1.50 to $.50 fee charged for reflective material on tags and stickers;
_ Cuts in half the $4 “surcharge” on licenses.
Negron’s proposal, which doesn’t have a House companion yet, reduces the fee increases by 55 percent and would result in about $250 million going from insurance companies “into the pockets of hardworking Floridians,” he said.
The tax break has saved insurance companies more than $3.4 billion since it went into effect, Negron argued.
“I want them to be prosperous so they can collect premiums and pay claims,” Negron, R-Stuart, said. “But in looking at this tax break, from 1989 through today that has been worth $3.34 billion that we have subsidized the labor costs of the insurance industry…But as we sit here in 2013, I personally believe…we should take this opportunity..to do something for the men and women we represent.”
Insurance and business lobbyists opposed the measure, suggesting that doing away with the tax break could chase companies away or keep others from relocating in the state.
But Sen. Jeremy Ring, a Margate Democrat, who described lobbyists’ rhetoric as “there’d be Armageddon if this passed,” said “it’s nice to finally call a bluff.”
But Sam Miller, executive director of the Florida Insurance Council, said the tax credit has helped produce jobs.
“It is not clear that repeal of the credit won’t endanger job creation. The state should move cautiously and be sure,” Miller said.
- The Associated Press contributed to this report.