Facing a skeptical Senate and many competing demands for spending, Gov. Rick Scott hit the road Monday on a three-day “tax cut tour” to prod state lawmakers to back his call for $1 billion in tax cuts next year.
With the feel of a candidate on the stump, a shirtsleeved Scott visited companies in Miami, Melbourne and Clearwater that could benefit from his package of business-friendly tax cuts, such as repealing a sales tax on equipment purchases by manufacturers and elimination of the corporate income tax on manufacturers and retailers.
Scott has launched a web site, floridafirstforjobs.com, with graphics that resemble those used in his re-election campaign, and if history is any guide, the next step is likely to be a burst of campaign-style ads to promote tax cuts on TV.
Scott also is asking mayors in both political parties to help distribute press releases in support of a record $250 million fund to attract jobs to Florida. In another sign of putting pressure on lawmakers, the website of the state’s economic engine, Enterprise Florida, now has a page with a form for people to directly e-mail their legislators, a form of advocacy widely used by trade groups but not governors.
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“Our economy is growing faster than the national economy,” Scott told employees at Monin Gourmet Flavorings in Clearwater, which makes syrups and fruit purees for hotels and restaurants. “We’ve cut taxes 50 times in five sessions, and guess what happens? Revenues keep growing.”
State revenues are growing. But neither the House, Senate nor the state’s own economists have reached such glowing conclusions as Scott.
Scott’s math and the Senate’s are particularly different, suggesting another collision course on taxes when the 2016 session begins in nine weeks.
Scott promised voters last year that he would cut taxes by $1 billion in the first half of his second four-year term, and repeated the pledge in his second inaugural address last January. Without the Legislature’s support, Scott won’t meet that goal.
Legislators agreed to about $400 million in tax relief in 2015, and Senate President Andy Gardiner, R-Orlando, said existing programs, largely in health care and education, will cost $1.6 billion more next year, and he recommended $250 million in tax cuts next year “as a starting point.”
“We have a responsibility to make spending decisions that maintain structural balance within our budget while being mindful of the impact current spending decisions will have in future years,” Gardiner said in a Sept. 8 memo to senators.
State economists are projecting a surplus of $635 million after most critical and priority needs are met next year, such as growth in Medicaid case loads and more school students.
Scott’s rosier fiscal picture took the total projected amount of state tax revenue next year of $31.6 billion and subtracted the current year’s total of recurring tax revenue, $28.2 billion, for a surplus of $3.4 billion, which requires combining recurring money, such as taxes, with one-time non-recurring money that is unreliable over the long haul, such as a huge settlement in a lawsuit.
The Legislature’s long-range financial outlook, adopted in September, uses smaller numbers than Scott of $1.6 billion in new recurring money or $2.3 billion in recurring and non-recurring money next year.
In Clearwater Monday, when Scott was asked if cutting taxes on businesses is more important than spending more on state services such as mental health institutions and struggling programs for the poor and disabled, he changed the subject.
“It’s exciting what’s gone on in Florida since I got elected in 2010,” Scott said. “I walked in with almost a $4 billion budget deficit, but today we have record funding for K-12 education, record funding for universities, record funding for state colleges. We funded our healthcare programs. We funded the environment.”
Scott is right when he says the total money spent on K-12 education is at a record high, but when enrollment growth, inflation and other factors are included, school spending has remained relatively flat for years.
PolitiFact has rated Scott’s claim of “record” school spending “mostly false.”
Also Monday, Scott’s chief budget expert sent a letter to all state agencies, assuring them that the state will have enough money next year to cut taxes by $1 billion, create a new $250 million fund to attract jobs to the state and still have enough left over to meet the state’s needs, including spending increases by agencies.
The revenue analysis by budget director Cynthia Kelly views Florida’s finances in rosier conditions than some lawmakers who have weathered multiple budget shortfalls.
“Because of the state’s robust surplus, the governor is also proud to accept many of your budget recommendations, especially those that provide a positive return on the state’s investment,” Kelly wrote. “Bottom line, there is more than sufficient revenue to fund all of the state’s mandatory increases, as well as the governor’s priorities for your agencies, the Florida Enterprise Fund and the proposed $1 billion in tax cuts.”