Florida businesses could save more than $100 million in taxes next year and shoppers would get another “tax-free” holiday under measures now on their way to the Florida Senate.

The House approved Gov. Rick Scott’s corporate tax break package (HB 7087) with a 92-22 vote that garnered support from more than a dozen Democrats despite concern from others that an anti-union component adopted late yesterday is unconstitutional.

The $121.1 million-a-year tax break plan would double the corporate tax exemption from $25,000 to $50,000. The new exemption would allow more than 3,500 small businesses to stop paying corporate income taxes altogether.

The tax plan also boosts tax credits for business investments in low-income communities and expands tax breaks for agriculture, industrial machinery, aircrafts and the entertainment industry.

Late yesterday, House GOP leaders amended the bill to require businesses that receive the tax credits to certify that they do not employ union workers. The anti-union language was tacked on in retaliation after Democrats tried to modify the bill to limit who would get the tax breaks.

The union restrictions make the bill unconstitutional, argued some Democrats during debate Wednesday afternoon.

But bill sponsor Steve Precourt, R-Orlando, said that shouldn’t make any difference.

“Yeah, there may be a judge somewhere who disagrees about whether or not it’s constitutional,” Precourt said. “So you’re just going to let some judge who might call it on you later on stop you from helping Floridians in some way?”

The House also unanimously approved a popular three-day sales tax holiday (HB 737) Aug. 3-5. The tax-free long weekend is estimated to cost the state and local governments about $31.8 million.

State economists found a few more dollars for lawmakers looking to close a $2 billion budget gap.

But not enough.

Revising their forecast from last October, the state’s Revenue Estimating Conference agreed that tax collections have climbed $48 million more than anticipated this year — but are expected to be $25.7 billion below forecast for 2012-13. The difference means legislators will have about $23 million in extra cash to spread around in the $66-billion budget they are just beginning to cobble together for the year beginning July 1.

“Nothing dramatic happened since the fall,” said Amy Baker, coordinator of the Legislature’s Office of Economic and Demographic Research, who is among those making Thursday’s forecast.

Rising costs and the state’s still-fragile economy have combined to leave lawmakers staring at a $2 billion shortfall next year. Still, that’s about half the hole they faced a year ago, a sign, analysts said, that Florida is slowly recovering from the recession.

Sales-tax receipts, the real driver of Florida’s budget, are up slightly. Corporate and real estate taxes also have picked up over the past year, analysts said. But signs of the troubled economy linger — with personal income down in Florida during the third quarter of 2011.

The state still has a two-year backlog of homes for sale, and the number of foreclosures in Florida continues to outstrip home sales, Baker said.

Florida shoppers won’t have to pay taxes on clothes, shoes, books and some other stuff that costs less than $50 or school supplies like notebooks and pens less than $10 for three days in August.

Gov. Charlie Crist signed the Aug. 13-15 tax-free holiday (HB 483) into law today, reviving the popular shopping savings lawmakers nixed for the past two years because of the state’s anemic tax collections.

This year’s tax holiday – a slimmed-down version of 2007′s 10-day savings schedule – is expected to cost the state $21.3 million and local governments nearly $5 million, according to a legislative staff analysis.

Items in the tax-free shopping basket, initiated in 2009, include backpacks, diaper bags, wallets and purses but not briefcases or luggage.

The gubernatorial campaign fur continues to fly in the battle between Chief Financial Officer Alex Sink and Attorney General Bill McCollum, this time over what is a tax “cut” and whether they’re good or bad for businesses.

Sink’s campaign took a swing at McCollum for opposing tax cuts for small businesses to jump-start the economy and create jobs.

In fact, McCollum told reporters yesterday that he didn’t think targeted tax credits or incentives work out so great in the long term.

Here’s what McCollum said after a speech to the National Federation of Independent Business.

“Targeted tax credits, in my experience in Washington, were minimally effective. They can be in the short run but they’re not in the long run very effective,” the former Congressman said.

After the two campaigns traded insults on other matters throughout the day, Sink’s campaign blasted McCollum for being against tax cuts.

“Career politician Bill McCollum says tax cuts don’t work, but he’s just plain wrong- wrong for small businesses, wrong for our economy, and wrong for everyday Floridians. The choice in this election just got a little clearer- a career politician who cites his decades in Congress as a reason to oppose tax cuts versus a businesswoman who knows what it’s going to take to get our economy back on track,” reads a press release issued by Sink’s campaign spokeswoman Conchita Cruz.

Hang on.

McCollum spoke about tax credits or tax incentives. Are they the same as tax cuts?

“He said tax credits and tax credits are tax cuts,” Sink said in an e-mail from Cruz.

This from McCollum’s campaign spokeswoman Kristy Campbell.

“It is laughable that Alex Sink, who has made thousands in personal campaign contributions to liberal tax-and-spend Democrats, would try to assert she is a fiscal conservative. Following more political stunts from her official office at taxpayer expense, Alex Sink has resorted to ridiculous attempts to obfuscate the facts.

“Bill McCollum has a bullet-proof record of fighting to cut taxes across the board for families and businesses that speaks for itself,” Campbell said in a press release.

Cigar aficionados, rejoice. Cigarette smokers, not so much.

The House officially signed off on a buck-a-pack cigarette tax and the Senate agreed to exempt cigars from what lawmakers like to call a “surcharge” on tobacco.

Those who dip, chew or snuff also will pay more – also about $1 per ounce of loose tobacco.

The hope is to raise at least $800 million, most of which will pay for the state’s Medicaid program, and which lawmakers have included in next year’s budget.

Senate budget chief J.D. Alexander, R-Lake Wales, and his House counterpart Ellyn Bogdanoff, R-Fort Lauderdale, held a series of brief meetings to close out the tobacco deal, which Gov. Charlie Crist said today he would sign.

The tobacco tax was the brainchild of Boca Raton Democrat Ted Deutch.

Lawmakers will vote on the bills on Friday.

Lawmakers closed out the $65 billion budget this morning that includes nearly $2 billion in taxes and fees, including a $380 million property tax increase if school boards approve it.

Senate budget chief J.D. Alexander and House counterparts David Rivera and Marcelo Llorente resolved most of their disagreements over the weekend and sealed the deal this morning without sending any unresolved disputes to Senate President Jeff Atwater and House Speaker Larry Cretul.

One of the losers in the deal: Florida Forever, the state’s land-buying program received no new money. But the budget chiefs did agree to issue $250 million in bonding authority from this year. They could not sell the bonds because of a decline in real estate transaction taxes used to pay them back.

The legislature closed a real estate tax loophole during the session that they hope will generate enough money to keep Florida Forever running next year.

A last-minute change this weekend shifted $25 million for Florida Forever to the Everglades clean-up program, bringing the total for that to $50 million.

Also included in the budget are more than $800 million in fees, including a hike in driver’s licenses and vehicle registrations and court filings. And smokers will pay an extra buck-a-pack for cigarettes to raise about another $800 million to be spent on the state’s Medicaid program.

State workers earning more than $45,000 a year will see a 2 percent salary cut but university workers are exempt. That amounts to a $30 million cut from general revenue, far less than the $100 million in state employee pay cuts the House had original proposed.

School boards, meanwhile, got the OK to hike property taxes an additional 25 cents per $1,000 of value with a majority vote. Voters would have to sign off on the tax increase at the general election in 2010. The tax increase would raise $380 million for school districts statewide if implemented by all 67 counties, including nearly $17 million for Palm Beach County.

Bright Futures will no longer cover tuition hikes, including the 8 percent tuition increase included in the budget. Lawmakers also gave universities the ability to raise tuition up to 15 percent.

The Senate unanimously approved a buck-a-pack cigarette tax expected to raise nearly $1 billion for health care programs.

Boca Raton Democrat Ted Deutch made the issue his top priority and the state’s dire fiscal straits – a $6 billion spending shortfall – helped persuade some senators to hold their nose and vote for the bill although they object to it.

The tax will discourage smokers and result in healthier Floridians while cutting back on the amount of money the state pays for tobacco-related illnesses in Medicaid patients, Deutch argued.

A provision to make it illegal to possess cigarettes sold on Indian reservations was taken out of the bill.

Instead, the measure (SB 1840) was amended to allow every member of the tribe to buy the equivalent of five packs of smokes a day for every day of the year. The population count of the tribes includes kids.

The Senate relies on nearly $900 million from the tobacco tax although the House does not have a similar provision.

A buck-a-pack cigarette tax made it out of the Senate budget committee late this evening over the objections of cigar-makers.

But cigars could get yet be spared from the $1 per ounce “surcharge” on loose tobacco and cigars included in the plan, which would generate about $990 million a year for health care programs.

Sen. Ted Deutch, the bill’s sponsor and vice-chairman of the Senate Ways and Means Committee that passed the bill today, could not vote on his priority bill because he had to leave Tallahassee suddenly last night due to a death in the family.

“Ironically it was a death related to lung cancer,” said Sen. Thad Altman, R-Melbourne, chairman of the Finance and Tax committee who presented the bill in Deutch’s stead.

Reps of the cigar industry argued that a new federal tax hiked prices on cigars from 700 to more than 2,000 percent and an additional state tax would put about 10,000 workers in Florida out of jobs.

“There are very few businesses that could adapt that quickly and move on,” Richard Coates, lobbyist for the Cigar Association of America, told the panel.

(more…)

Sen. Ted Deutch’s top priority – a buck-a-pack cigarette tax – is virtually guaranteed to get passed today by the powerful Ways and Means Committee, its last stop before heading to the floor.

But the Boca Raton Democrat won’t be able to vote on the bill he’s pushed since joining the legislature last year.

Deutch had to leave town suddenly last night because of a death in the family.

Sen. Thad Altman, a freshman Republican from Melbourne who chairs the Finance and Tax Committee, will present the cigarette tax bill (SB 1840) to the budget panel, which Deutch vice-chairs, this afternoon.

Senate budget chief J.D. Alexander has included the $1 billion the tax is supposed to generate in the budget to pay for health care, making it almost certain it will pass out of his committee today.

The House and the governor haven’t signed off on the tax yet.

The Senate budget plan includes no boost to health care spending despite $1 billion earmarked from the federal stimulus package and an anticipated $1 billion from a proposed cigarette tax hike.

That’s raised the bipartisan hackles of Senate Health and Human Services budget committee members, including Chairman Durell Peaden, who phoned in his complaints on Friday to Gov. Charlie Crist.

“You want it in oral communication or blood pressure readings?” Peaden, R-Crestview, said of his disappointment.

Peaden said he has no clue where the money meant for health care is going.

“Your guess is as good as mine,” he said.

Part of the stimulus money is going to pay for programs for the medically needy and to accommodate increases in the Medicaid caseload, as required to get the federal stimulus money.

But nearly $800 million of the stimulus money is going to be used for non-health care programs and replaced with money a buck-a-pack cigarette tax proposal — if it passes.

Either way, the buck-a-pack cigarette tax proposal will generate $1 billion to offset the more than $1.3 billion the state now pays for tobacco-related illnesses, the proposals sponsor Sen. Ted Deutch said.

“This legislation will generate in excess of $1 billion in the first year. That is new revenue that will go into the health care trust fund for the purpose of funding health care,” Deutch, D-Boca Raton, said..

Sen. Nan Rich called the fund shift a “bait-and-switch” that defies the intent of the federal stimulus plan.
(more…)

Talk about taxing strippers and other XXX-rated activities spawned a few words of caution from Senate Democratic Leader Al Lawson during a caucus meeting at lunchtime.

During a presentation on sales tax exemptions — which lawmakers are considering repealing this year — Sen. Eleanor Sobel of Hollywood asked about doing away with the exemption for adult entertainment.

That drew laughs from some of the caucus members and a bit of skepticism on Lawson’s part.

“We may have some frequent users in the legislature,” Lawson, D-Tallahassee, joked. “We might have some resistance to that.”

Gov. Charlie Crist’s budget guru Jerry McDaniel, under pressure from Democrat Ted Deutch, agreed that tax hikes and further budget reductions should be considered as lawmakers grapple with ever-declining revenues.

McDaniel defended the use of the Lawton Chiles endowment and other trust funds to bridge a spending gap, calling it less painful than raising taxes or making deeper cuts in services.

But, Deutch wanted to know: “Should all of those options be on the table?”

“Yes,” McDaniel replied.
(more…)