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Scott’s latest proposed tax break draws praise from manufacturers

Wednesday, January 9th, 2013 by John Kennedy

Gov. Rick Scott drew praise Wednesday from business groups for proposing another round of tax cuts for Florida manufacturers.

Scott said he would push the Legislature this spring to eliminate a requirement that businesses show they have expanded their productivity by at least 5 percent to earn a sales tax exemption on equipment purchases.

Scott wants to exempt manufacturers completely from the state sales tax when they buy equipment. It’s expected to steer $57.5 million from the state treasury its first year on the books, and $115 million the following year.

“We know that when manufacturers purchase equipment in our state, they are investing in Florida workers for years to come,” Scott said. “We want more manufacturers to move to Florida, and our existing manufacturing companies to buy the equipment they need to grow and create more jobs to support Florida families.”

Florida TaxWatch President Dominic Calabro said that erasing the tax will spur job growth. TaxWatch urged making equipment purchases tax-free in a report released in 2011.

“This tax has clearly been and remains an impediment to capital investment and the related job creation in Florida,” Calabro said.

The Legislature embraced Scott’s call last year to reduce what had been a 10 percent production requirement to the current 5 percent level.

The break for manufacturers is the second sweetener Scott is offering businesses next year. In November, the governor said he would ask lawmakers to expand the current $50,000 exemption to the state’s corporate income tax to $75,000.

The levy now takes in $2.1 billion, but under Scott’s proposal, businesses wouldn’t have to pay the tax on their first $75,000 in taxable income. The plan would cost $8 million next year and remove 2,000 businesses from the corporate tax rolls.

 

 

Scott OKs business tax cuts and rebrands unemployment comp

Wednesday, March 28th, 2012 by John Kennedy

Gov. Rick Scott signed legislation Wednesday that includes a host of tax cuts for businesses and rebrands the state’s financially strapped unemployment compensation system.

Scott said the four bills he signed, flanked by leaders of state business organizations, represents his “job creation and economic growth agenda.” One of the measures, (HB 7087), also doubles to $50,000 the state’s corporate income tax exemption — further shrinking a levy Scott has vowed to eliminate over the next five years.

“With this plan, our unemployment rate will continue to go down,” Scott said. “Job creators will experience tax relief. Job seekers will have a better chance to get back to work. Florida is clearly going to be the state that everyone has to compete with.”

Among the more controversial measures is the unemployment compensation bill (CS/HB 7027).  Scott and the Republican-led Legislature last year reduced the number of weeks jobless workers could receive benefits, and this year, rename the system the “reemployment assistance program.”

The legislation also cuts the tax businesses pay to cover employees in the system, saving companies an estimated $800 million over the next three years. Currently, employers were on track to pay $171-per-worker this year. The bill cuts that to $121 for each employee.

The legislation also delays Florida’s efforts to rebuild its unemployment compensation trust fund by reducing the base wage subject to the tax, and increasing the debt repayment schedule. The delay was pushed by such business groups as the Florida Chamber of Commerce, Associated Industries of Florida and the National Federation of Independent Business, which said prospects of an $817 million unemployment compensation tax increase would be tough to absorb in a still-fragile economy.

Scot acknowledged Wednesday that he was initially reluctant to embrace what amounts to the third consecutive year of delayed payments. But Scott said he eventually saw a benefit in slowing the debt payments.

“It made sense,” Scott said. “We want employers to hire more people. We have to think like they do. They’ve got to keep their costs as low as they can.”

 

 

After years of bashing, Scott sends Obama ‘thank you’ letter on taxes

Tuesday, February 28th, 2012 by John Kennedy

Republican Rick Scott has spent much of the past few years ridiculing President Obama — leading the Conservatives for Patients Rights campaign against the federal health care overhaul and — as governor — refusing millions of dollars in federal grants linked to the effort.

But when the Democratic president proposed cutting the federal corporate income tax rate to 28 percent, he drew rare praise from his Florida antagonist. At the White House last Sunday for a Governors’ Association meeting, Scott gave Obama a letter thanking him for “taking this step in the right direction.”

“Given that the United States currently burdens companies with the second highest tax rate in the world, every tax reduction makes American businesses more competitive,” Scott said.

Scott is pushing legislation that would double the state’s corporate income tax exemption to $50,000, efffectively exempting about three-fourths of the companies that now pay the 5.5 percent levy on earnings. It’ll cost taxpayers about $30 million next year, legislative analysts said.

Lawmakers balked last year on Scott’s initial plan to for a big cut in the tax. But the governor said he remains committed to ending the tax, which formerly pulled almost $2 billion into the state budget.

Here’s Scott’s letter: Tax letter to POTUS

 

Scott gets his (downsized) corp tax break

Thursday, May 5th, 2011 by John Kennedy

The Florida House approved a $30 million cut in the state’s corporate income tax Thursday, giving Gov. Rick Scott a small share of the deep reduction in the levy the first-year chief executive had sought.

In the usually heavily partisan House, many Democrats joined with ruling Republicans in sending the measure to the governor, who has said he sees the cut as a good first-step. The measure (CS/HB 7185) was OK’d 110-5.

“Florida’s open for business,” said Rep. George Moraitis, R-Fort Lauderdale. “We’re cutting taxes.”

Scott sought a $459 million, first-year reduction in the state’s corporate income tax, by reducing the state’s 5.5 percent rate to 3 percent.

House and Senate budget-writers, though,  agreed only to a $30 million cut,  increasing the state’s exemption on corporate taxpayers.

Currently, businesses are exempt from the corporate levy if their payments would total less than $5,000. The legislation would boost that exemption to $25,000, with supporters saying it effectively exempts almost half of Florida’s 30,000 businesses now paying the tax, taking mostly smaller companies off the tax roll.

Rep. Steven Precourt, R-Orlando, sponsor of the measure, said it would save these companies an average $1,100-a-year.

Rep. Dennis Baxley, R-Ocala, said the tax reduction will eventually help state lawmakers, by helping generated more tax dollars to fuel future budgets. Lawmakers this year struggled to close an almost $3.8 billion budget shortfall in the $69.7 billion spending plan awaiting a vote Friday, the session’s final scheduled day.

“Small businesses are tax collectors,” Baxley said. “I’ve got dozens of small businesses back home and they’ve shuttered their doors and they don’t send taxes to us anymore. That’s why we’re in a $4 billion hole.”

Only a handful of Democrats voted against the cut.

Among them was Rep. Jeff Clemens, D-Lake Worth, who said it would do little for businesses and was a move toward eventually eliminating the corporate levy — which he opposes.

Clemens said, “I appreciate the intent,” of helping small businesses. But he criticized lawmakers for not setting aside dollars for teacher merit pay and moving to cut unemployment compensation benefits for Florida’s jobless.

Rep. Elaine Schwartz, D-Hollywood, said she supports the tax cut. But providing better financing for schools and health and human services is what will help businesses prosper, she said.

“We can’t take our eye off that ball,” Schwartz said.

Scott’s tax breaks dwindle, but gov likes budget deal

Tuesday, May 3rd, 2011 by John Kennedy

Within hours of legislative budget-writers declaring they had reached a deal Tuesday, Gov. Rick Scott was praising it — although it only gives him about one-sixth of the tax breaks he demanded.

“These are great first steps and will move our state in the right directions,” Scott said, adding that the budget proposal meets his “core principles” of shrinking government, cutting taxes and overhauling public pensions.

Lawmakers are likely pleased with Scott’s early take, especially because — by the numbers — the first-year governor falls short of what he was wanting. Scott sought a $459 million, first-year reduction in the state’s corporate income tax, by reducing the state’s 5.5 percent rate to 3 percent.

Budget-writers, though, have agreed to a $30 million cut — fueled by increasing the state’s exemption on corporate taxpayers.

Currently, taxes aren’t owed by companies whose payments would total less than $5,000; lawmakers would boost that exemption to $25,000, with supporters saying it effectively exempts almost half of Florida’s businesses, most of them smaller companies.

Scott’s biggest tax-cut victory is in reducing water management district property-tax rates by more than $200 million. Other reductions include a $25.6 million back-t0-school sales tax holiday — which Scott didn’t even include in his wide-ranging tax-cut package.

But Scott seems happy. The proposal, he said, sends a message to other states, “that we are clearly open for business.”

Budget deal done — seasoned with pork

Tuesday, May 3rd, 2011 by John Kennedy

House and Senate budget negotiators reached a deal Tuesday morning on a state budget — after leaders broke an impasse over health and human services funding and also tucked millions of dollars in hometown projects into the spending plan to satisfy key lawmakers.

The deal keeps lawmakers on track for an on-time adjournment Friday, the final scheduled day of the session. It also may allow Gov. Rick Scott to claim a modest achievement — with $308 million in tax breaks tucked into the proposal.

That’s far from the $2 billion Scott demanded. But Senate budget-writer J.D. Alexander, R-Lake Wales, said the first-year governor should be satisfied.

“We all fight hard for the things we believe in,” Alexander said. “But at the end of the day, I think the governor has got a lot of the things he’s interested in, including some reduction in the corporate tax.”

Scott came into the session seeking a more than $450 million cut in the corporate income tax. Instead, lawmakers have advanced a $30 million reduction — a level close to what they’re also setting aside for a three-day back-to-school tax holiday in late summer.

In other issues, the Senate abandoned its push to slash spending on the state’s Medically Needy and Medicare Aged and Disabled programs, which serve 90,000 severely sick and elderly Floridians. Instead, the programs have maintained current-year funding.

But hospitals will absorb an even deeper reduction in Medicaid rate payments than earlier proposed by either the House or Senate. Hospitals will lose 12 percent of state reimbursement payments and nursing homes will absorb a 6.5 percent reduction.

The budget deal also was flavored with pork.

 The University of South Florida’s Polytechnic college in Lakeland, which has long been helped by Alexander, drew a stunning $46 million in state funding in the budget — about one-third of the state’s Public Education Capital Outlay (PECO) total — far outstripping the University of Florida, Florida State University and other bigger schools.

House budget chief Denise Grimsley, R- Sebring, also represents a district that includes a large chunk of Polk County.

“There’s a lot of advocates for every part of the budget,” Alexander said.

Scott not retreating on corp income tax cut

Monday, May 2nd, 2011 by John Kennedy

A day after Senate President Mike Haridopolos toughened his stance against the governor’s must-have corporate income tax cut, Republican Rick Scott said Monday that he still expected lawmakers to take steps to reduce the $1.8 billion levy.

A roughly 25 percent reduction in water management district property-tax collections was agreed-on Sunday by House and Senate budget negotiators. The cut was part of Scott’s wide-ranging $2 billion plan for slashing taxes. But is the water management district cut enough for Scott to declare victory?

Probably not, the governor said.

“I’m glad that they are doing the right thing in regards with water management districts,” Scott said. “And I remain confident that we’re going to start the process of eliminating the business tax. It’s clearly the way to get our state back to work.”

Would he veto a budget that didn’t make room for the tax cut, as the governor has hinted in radio addresses and interviews?

“I focused on three things with this budget,” Scott said. “Step one, we need to reduce the size of this budget.

“Everything I’m doing, as you know, as governor, is to get our state back to work….We still have a million people without a job. The budget that I expect to sign will reduce the size of government, the cost of government, and the business tax.”

Haridopolos on Sunday said he didn’t think the Senate would go along with cutting the corporate tax, although he conceded that he and Scott’s office had been working on some reduction plans.

 Scott’s proposal would have reduced the tax by $333 million next year– but Haridopolos said the Senate is more inclined to look at other reductions, leaving the 5.5 percent corporate income tax at its current level.

Question lifted from pension rewrite: Scott likes

Saturday, April 30th, 2011 by John Kennedy

Gov. Rick Scott said Saturday that the Legislature’s move to pull 3 percent pay contributions from 655,000 teachers, firefighters, police and other government workers is a “good first step.”

Scott’s comments, issued in a news release, may signal he’s satisfied with the relatively modest steps the Legislature took on revamping the Florida Retirement System.

 Scott had proposed a far more sweeping plan — including 5 percent contributions and closing the traditional pension to new enrollees, leaving a question mark hanging over the deal agreed to by lawmakers Friday night.

But Saturday, Scott seemed ready to sign the move into law, removing the cloud of a possible veto. Still, Scott also wants more in the future — hinting chiefly at a push to make the FRS more of a 401(k)-styled investment plan, rather than a traditional, defined benefit pension.

“It is my goal to continue to modernize Florida’s retirement system until it is no longer reliant on our state’s taxpayers,” Scott said. “But I’m pleased that we’re moving in the right direction.”

Unions and enrollees in the FRS have opposed Scott and the Legislature’s rework of the pension plan, dismissing it solely as a pay cut. Scott and business groups have tried to cast the change as aimed at shoring-up the plan — but the $1.1 billion drawn from the pension employee payments and other revisions is going straight into the state budget.

Scott is still seeking a $333 million corporate income tax reduction from the Legislature — money that could be made available with the worker payments to FRS, which has been solely taxpayer financed since 1974.

Cannon: “We’re going to do everything we can” to get Scott corp tax cut

Thursday, April 28th, 2011 by John Kennedy

House Speaker Dean Cannon made a rare visit to the House press gallery Thursday evening, saying he’s optimistic about an on-time finish to the session last week — and hinting Gov. Rick Scott’s corporate income tax break would emerge, somehow.

“I’ll just say this: Number 1, that’s his job, to advocate for his position,” Cannon said. “We’re hammering out the positions of the various conference committees. He has been eminently reasonable throughout this entire session…

“We’re going to do everything we can to get him some meaningful corporate income tax relief. It’s a big issue he campaigned on. No promises, too soon to tell,” Cannon concluded.

Three-day sales tax holiday looks like a deal

Wednesday, April 27th, 2011 by John Kennedy

House and Senate budget negotiators were near agreement late Wednesday on enacting a three-day, back-to-school sales tax holiday next summer.

The House agreed with the Senate’s proposed $25.6 million tax break, with further details still to be ironed out. But it looks like the second straight year of a consumer giveaway, brought back last August after a two-year absence is assured.

“We’re a great believer in a three-day sales tax holiday…and I think the House is, too. We’re probably in agreement on that,” said Sen. Don Gaetz, R-Niceville, who is leading Senate budget negotiations with the House over a wide range of tourism and economic development issues.

Still unsettled is Gov. Rick Scott’s push for organizing economic development agencies under a newly constituted Commerce Department. The House and Senate are at odds over how to structure the agency — headed by a secretary reporting to Scott.

The governor Wednesday also suggested he could scale-back his ambitions — perhaps leaving the state’s employment arm, the Agency for Workforce Innovation, out of the department, along with Visit Florida, the tourism organization.

Enterprise Florida, the Office of Tourism, Trade and Economic Development, and most of the Department of Community Affairs may all roll into the new Commerce Department, under varying proposals.

But one proposal by the House — and promoted by Scott’s office — looks like it faces long odds in the Senate. Scott and the House want the new commerce secretary to be able to have a salary supplemented by private-sector industries once job-performance standards are met.

Democratic Sen. Eleanor Sobel of Hollywood likened the proposal when first floated earlier this year, to ‘payola,’ recalling the radio pay-for-play scandals of the 1950s.

“There was some real concern about allowing someone to in effect be a regulator and also determine where incentives and economic development dollars would go, and then be compensated by some of those same private sector folks,” Gaetz said. “We have some real concerns…It’s very different from the Senate’s view of the matter.”

Scott’s proposed corporate income tax cut — a $333 million first-year reduction — also remains troubled in the Legislature.

Senate President Mike Hardipolos, R-Merritt Island, said about tax breaks, “there are a multitude of things that are on the table.” But the corporate cut may not be among them, he said.

“I know it’s the governor’s priority and we’re trying to get there to help him,” Haridopolos said. “But I’m in my eleventh session now. I’ve had very few people in my career come to me and say the reason why we are not coming to the state of Florida is the corporate tax rate.”

Cannon and Haridopolos talk of refereeing budget fight, and then there’s Scott’s tax cut

Tuesday, April 26th, 2011 by John Kennedy

House Speaker Dean Cannon and Senate President Mike Haridopolos made an unusual joint address Tuesday morning to the state House, praising the work – and their friendship — which they said led to the framework of a budget deal unveiled earlier in the day.

“We’re poised to bring this thing in for a landing on time,” said Cannon, R-Winter Park, with an eye on the session’s scheduled May 6 close.

Plenty of differences stand between the two sides. But setting budget allocations — as the two sides did Tuesday – sets the stage for public negotiations to begin Wednesday morning. As usual, Tuesday’s horse-trading was conducted behind closed doors between the leaders – belying Florida’s government in the sunshine constitutional standard.

Cannon apparently was satisfied when the Senate agreed to put on a ballot next year his demand for a proposed overhaul of the Florida Supreme Court — which rejected three constitutional amendments approved last year by state lawmakers.

Even with the court deal, Senate budget chief J.D. Alexander, R-Lake Wales, and his House counterpart, Rep. Denise Grimsley, R-Sebring, traded harsh words. And Alexander accused Cannon of “gamesmanship.”

“I really applaud the speaker. He is my friend. And this friendship really, really made a difference as we got through this difficult time,” said Haridopolos, R-Merritt Island, after leaving the House floor. “Yesterday was really and up and down day.”

Haridopolos wouldn’t say what the Senate earned in return for the court concession. But he did acknowledge that some of the focus now is on sated Gov. Rick Scott, who is demanding a reduction in the state’s corporate income tax — part of $2 billion in tax cuts he demanded in his budget blueprint.

“I think you’ll see tax relief within this budget,” Haridopolos said. “We’re going to find out where the most support is, and we’re going to find out where the most support is within the various tax relief items.”

Scott says corp tax cut “right thing for the state”

Monday, April 25th, 2011 by John Kennedy

The blurry framework of a state budget showed some signs of emerging Monday, but scores of big-ticket issues and personal  friction continue to stand between state lawmakers and a deal.

Gov. Rick Scott also is a wild card — repeating his call Monday for a corporate income tax cut that failed to gain support earlier in the day in a Senate committee.

“I’m confident it’s going to happen,” Scott said. “Just discussions I’ve had, I think it’s going to happen. It’s the right thing for the state.”

Senate Budget Chairman J.D. Alexander gave prospects for the tax cut poor odds, shortly after the Senate Commerce and Tourism Committee postponed action on a Scott-pushed proposal carried by Sen. Garrett Richter, R-Naples.

 But Scott said lawmakers could enact the tax cut without having to slash even deeper budget proposals that already reduce public school spending by at least $1 billion.

“I think there are funds there,” Scott said.

Scott spoke after a closed-door meeting with former U.S. Sen. Bob Graham, who also was Florida’s chief executive from 1979-87. Graham said the pair exchanged ideas about economic development. But he also said he didn’t put a lot of faith in tax cuts as a catalyst for luring businesses.

Florida’s history shows that tax cuts have coincided with periods of low growth in jobs.

“That doesn’t seem to be a very strong recommendation that tax cuts are either the way to create jobs or enhance the value of  jobs,” Graham said.

Graham also is wary of the reductions in education spending promoted by Scott and lawmakers.

Graham said he shared his concern with Scott. It was received, “respectfully,” Graham said.

Scott pushes tax cuts; warns against special interest hijackers

Friday, April 22nd, 2011 by John Kennedy

Gov. Rick Scott used his weekly radio address Friday to fire another warning shot at Florida lawmakers unwilling to embrace his call for $2 billion in corporate- and property-tax breaks.

He also called on listeners to call their lawmakers, as the Legislature enters its second-to-last scheduled week far from any agreement on a budget deal.

“I will not allow special interests to hijack your tax dollars and squander the opportunity to fix our economy,” Scott said. “Please join me in calling on both the House and Senate to reduce taxes for businesses and property owners so we can get Florida back on track.”

A week ago, Scott hinted for the first time in his radio address that he would reject a state budget that didn’t include the tax cuts — although he stopped short of using the word veto. The latest spot seems to build on that message.

House Speaker Dean Cannon, R-Winter Park, said Thursday night that lawmakers were trying to find a way to satisfy the governor. Of course, Cannon also urged that it was important for Capital watchers not to get “hung up” on the idea that the session would end in its scheduled 60 days.

Shock radio: Scott ratchets-up tax cut demand in weekly address

Friday, April 15th, 2011 by John Kennedy

Gov. Rick Scott’s weekly radio address includes a promise to voters — and maybe a threat to state lawmakers who have so far ignored his demand for $2 billion in tax cuts, mostly helping corporations and property owners.

“”I remain certain that any budget I sign into law will do the following things: reduce the size and scope of government, reduce the cost of government, and pass those savings on to taxpayers in the form of tax cuts,” Scott said.

“ The budget proposal I sent to the legislature does those three things. I will not compromise on these principles,” he concluded.

Scott’s fellow Republican House and Senate leaders have punted their attempts to resolve at least $3.3 billion in differences between their rival budget plans until after a Passover-Easter break.

House Speaker Dean Cannon, R-Winter Park, and Senate President Mike Haridopolos, R-Merritt Island, have said they’d welcome a chance to cut taxes. But to make room for the giveaways, even deeper spending cuts would likely have to be made.

 Lawmakers are already uneasy about cutting public schools by $1 billion, while also reducing health and social service programs. But the first-year governor clearly wants more.

Scott is certain to try to burnish his anti-tax, smaller government cred over the weekend, with the governor slated to participate in tea party events tonight and Saturday in Jacksonville and St. Augustine.

Will life get tougher for Florida’s poor? Scott: “I hope not.”

Tuesday, April 5th, 2011 by John Kennedy

Gov. Rick Scott said Tuesday he still expects the Florida Legislature to embrace his call for $2 billion in tax breaks, mostly for corporations and property owners, even though both the House and Senate are poised to approve budgets this week that ignore his pitch.

“I believe they will,” Scott said. “It’s something that’s very important to getting the state back to work. I really believe that we’ve all got to understand that we’re competing with 49 other states and a lot of other countries. And we’ve got to make this a state where we want to live, work and play.”

In cutting $1 billion from schools and imposing deep reductions in programs serving the poor, elderly and disabled, legislative leaders have said the budget-slashing would have to be even tougher to make room for Scott’s push to phase-out the corporate income tax and reduce property taxes going to schools.

Scott wouldn’t talk about the prospect of vetoing a budget without the cuts. “I’d rather not think about hypotheticals,” the governor said.

But lawmakers also have hinted they are wary of potential political backlash if they cut programs for some of Florida’s neediest — while handing out tax breaks. Meanwhile, higher tuition costs, electric rate hikes and property insurance boosts all look likely to emerge from a Legislature that claims an aversion to tax and fee increases.

Asked if life would get tougher for lower-income Floridians when the Legislature adjourns in May, Scott paused.

“I hope not,” Scott said. “First off, we’ve got to get this state back to work. The thing that impacts people the most in this state right now is the 1.1 million people without a job. If we take the different pieces…my goal is to make sure we’re reducing the cost of state government. But the biggest thing is, people need a job.”

Scott budget plan rolls back corporate biz tax, cuts property taxes $1 billion

Thursday, February 3rd, 2011 by Dara Kam

Gov. Rick Scott’s budget plan includes a tax cut for businesses that would decrease corporate income taxes from 5.5 percent to 3 percent and roll back property taxes by $1 billion, the governor said in Tampa this afternoon.

Scott did not reveal details of how he plans to come up with the savings while also closing a $3.62 billion budget deficit but is scheduled to release his entire budget on Monday in Eustis.

Scott’s also blaming Florida’s budget woes in part on the federal health care law recently struck down by a Pensacola federal judge as unconstitutional.

Senate prez dashes guv’s hopes for biz tax cuts

Wednesday, January 12th, 2011 by Dara Kam

With a $3.5 billion budget hole looming, Senate President Mike Haridopolos said it’s highly unlikely that lawmakers will approve any new – or expand any existing – tax breaks for businesses.

That would put Gov. Rick Scott’s plans to do eventually do away with the state’s corporate income taxes on hold, at least for this year.

“I don’t see that happening at this point. That’s something I’d like to do. But we’re $3.5 billion short and the promise of no tax increases, I don’t see the math yet. But Rick Scott is a very able executive. If he and his budget team can find a way to make it happen, we’re going to be all ears,” Haridopolos, R-Merritt Island, told reporters during a Q-and-A this afternoon.

No more tax breaks would also put on ice Scott’s proposed expansion of school vouchers paid for by businesses, one of the governor’s top priorities.

“There’s probably no bigger advocate of tax cuts in the legislature,” Haridopolos said. “I’m a big proponent of tax cuts. This is not a year I can afford to push them through.”

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