To create a tax break for the Miami Dolphins, Florida might eliminate a tax break for Miami’s foreign banks.
On Thursday, the state Senate is scheduled to vote on a bill allowing Florida to pay out $15 million a year in sales-tax rebates for stadium renovations, including a possible $3 million yearly subsidy for the Dolphins’ Sun Life Stadium. To pay for the new stadium dollars, the legislation would end a tax deduction reserved for international banking operations, which in Florida are clustered in the Miami area.
The deduction dates back to the 1980s and costs Florida about $14 million a year in lost tax revenue, according to a Senate analysis. The targeted deduction involves arcane rules of global finance and banking regulation, making the issue an easy one to miss amid the heated argument over whether to invest public dollars in professional sports facilities.
“Which one is sexier: Super Bowls in Miami or international banking?” said David Schwartz, president of the Miami-based Florida International Bankers Association.
In a debate about the stadium plan Wednesday between auto magnate Norman Braman and the Dolphins’ campaign leader, lawyer and community activist H.T. Smith, the banking provision didn’t come up. Instead, the two argued over whether a $350 million upgrade to Sun Life would boost the economy enough to warrant tax dollars. Voters are slated to decide the issue in a May 14 referendum.
“We are a tourist economy,’’ Braman told the Downtown Bay Forum luncheon about the plan to raise a Miami-Dade hotel tax to 7 percent from 6 percent to fund about a third of the renovation. “We should not raises taxes on people for the right of coming in here and spending money in our economy.”
Smith, who said he is being paid $20,000 to help lead a political action committee established by the Dolphins, countered that the combination of hotel taxes and about $190 million in private dollars required for the project makes the offer too good for Miami-Dade to pass up.
“My community can’t stand any more taxes,’’ he said. “Let the tourists pay. Let the private enterprise pay.”
While it has gotten little attention publicly, the banking provision is causing some consternation among advocates for the stadium plan. The Greater Miami Chamber of Commerce was an early supporter of the Dolphins’ stadium plan, before the banking provision was added at a March 6 Senate hearing. Now the business group views the bill “with mixed emotions,’’ Chamber President Barry Johnson wrote in an e-mail this week.
“Both an improved stadium and our community’s international banking are important to us,’’ he wrote.
Miami-Dade commissioners voted in January to urge passage of the Dolphins-backed legislation, and earlier this month approved a deal negotiated by Mayor Carlos Gimenez to give the stadium about $289 million in county hotel taxes over the next 26 years in exchange for the Dolphins refunding $120 million in 2043 and paying up to $120 million in penalties if major events don’t come to the stadium, including four Super Bowls. The team also will pledge to remain in Miami-Dade for 30 years.
A Gimenez spokesman, Fernando Figueredo, said the county isn’t getting involved in lobbying for the Dolphins bill or against the repeal of the banking tax break. “Obviously, we would rather it not impact the banking industry here,’’ Figueredo said of the stadium funding. “We would rather not see it in there.”