Florida

Florida House and Senate battle over tax cuts

The tax-cut battle lines have been drawn.

On one side is the House, which on Tuesday unveiled $690 million worth of proposed tax cuts on everything from cellphones and cable TV to textbooks and gun club memberships.

“The average Floridian pays about $1,800 a year in state taxes,” said the chairman of the House finance and taxation committee, Rep. Matt Gaetz, R-Fort Walton Beach. “That’s the lowest in the country. But we can do even better. And we will.”

On the other side is the Florida Senate, which is holding off revealing details of its tax-cut plan until it helps the state salvage $2.2 billion in a federally-funded program known as the Low Income Pool (or LIP) for hospitals that treat uninsured, under-insured and Medicaid patients. The program, known as LIP, is scheduled to expire June 30 unless the state can reach agreement with the federal government on an extension. The Senate is proposing to expand health coverage to help offset the costs to hospitals.

“I don’t think we’re anywhere near talking about what the number is,” said Senate President Andy Gardiner, R-Orlando, on Tuesday when asked about possible tax cuts. “There’s still a lot of things that have to be resolved before we can get to that point.”

Somewhere between the two camps is Gov. Rick Scott.

On Tuesday, his staff helped passersby at the Capitol calculate what they would save under Scott’s proposed plan to cut the sales tax on cable, satellite and cellphones by 3.6 percent, which would cost the state about $470.9 million, or about $43 for the typical resident. The House announced a similar tax cut on Tuesday.

“The decisions made at kitchen tables about how to spend money are always better than the decisions made by politicians far away,” Gaetz told reporters during a noon news conference.

Meanwhile, Scott’s staff is bonding with the Senate on a plan to replace LIP with a program to distribute money for uncompensated care to hospitals based on the services they provide, not just targeting a few select hospitals. Representatives with Scott’s administration will fly to Washington on Wednesday to advocate for the Senate plan, which is sponsored by Sen. René García, R-Miami, said Senate Appropriations Chairman Tom Lee, R-Brandon.

“At this point, we’re sort of on standby waiting for word back from Washington,” Lee said.

Until the Senate hears back, Lee said, there will be no deciding which taxes to cut.

“We’re very much in the posture to meet the House on tax cuts if in fact we have a resolution on healthcare,” Lee said.

The House, which doesn’t support an expansion in healthcare coverage, isn’t waiting for such a resolution. In fact, its Tuesday reveal was meant to pressure the Senate to stop stalling on its tax package.

“We’re eager for the Florida Senate to join us in our desire to cut taxes,” Gaetz said.

Lee, speaking for Senate leaders, wasn’t impressed.

“The House organized a media event to advance a tax package,” Lee said. “The Senate has gone about developing a tax package more quietly.”

Lee said more than $800 million has passed committees but awaits a vote in appropriations.

“We’re unlikely to move those cuts out of appropriations until we have clarity on the healthcare funding problems,” he said.

Contact Michael Van Sickler at mvansickler@tampabay.com. Follow @mikevansickler

House tax-cut plan at-a-glance

The Florida House’s proposed tax-cut package is about $17 million more than Gov. Rick Scott’s plan. Here are targeted cuts and estimated savings:

▪ Reduce the communications services tax by 3.6 percent: $470.5 million.

▪ Reduce the sales tax on commercial leases from 6 percent to 5.8 percent: $53.1 million.

▪ Exempt college textbooks and other instructional material from sales tax: $43.7 million.

▪ Raise the property tax exemption for residents who are widowed, blind or totally disabled: $41.3 million.

▪ Exempt certain agricultural items from the sales tax: $13.4 million.

▪ Create a new corporate income tax credit for defense contracting companies who hire Florida-based contractors: $5.5 million.

▪ Exempt books and other reading materials sold at book fairs: $2.8 million.

▪ Exempt support organizations from collecting a sales tax if the tax is paid on school concessions: $1.7 million.

▪ Exempt gun club memberships from sales tax: $1.2 million.

▪ Create a credit or refund for wholesalers selling aviation fuel to a university based in Florida offering a graduate program in aeronautical or aerospace engineering and flight training through a school of aeronautics or college of aviation: $900,000.

▪ Exempt vehicles bought by service members overseas and brought back to Florida from the sales tax: $800,000.

▪ Increase exemptions for service members: $200,000.

▪ Create a Back-to-School Sales Tax Holiday, July 31-Aug. 2: NA.

▪ Create a sales tax exemption for items $1,000 or less sold by certain small businesses: NA.

▪ Give income tax credits for companies that engage in research in Florida: NA.

▪ One-time increase in tax credits for environmental cleanups: NA.

▪ Repeal any remaining exceptions to the 2005 elimination of estate tax repeal: NA.

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