Goodwill hunting?

Published: Friday, January 13, 2006 at 6:01 a.m.
Last Modified: Thursday, January 12, 2006 at 11:40 p.m.
Promising they weren't motivated by this year's elections, House Republicans proposed the biggest single tax cut in state history Thursday: A week in August without sales taxes.
Democrats followed with a proposal to give every Florida homeowner $100.
Making such largess possible: An unexpected $3.2 billion in tax revenue for lawmakers to spread around.
"We have been blessed," said Rep. Joe Negron, a Stuart Republican who chairs the House budget committee and is running for attorney general this year. "I think we should give some of the money back to the people who sent it to us."
But some of the money would go back to people who have not contributed to Florida's budget windfall: tourists shopping here in early August.
Negron's bill would eliminate the sales tax on all items that cost up to $5,000 for the first week of August. Purchases by businesses would be exempted from the tax break. Negron plans to have the mega-holiday supplant last year's tax holidays for back-to-school supplies and items for hurricane preparedness.
The weeklong sales tax holiday would cost the state about $460 million in lost revenue, and counties would lose $40 million.
Negron said the proposal had nothing to do with an effort to woo voters in an election year.
"We're just keeping our word," Negron said of the GOP anti-tax message, although lawmakers had a similar revenue windfall last year and didn't propose such a sweeping plan. In the last election year, 2004, lawmakers passed a sales tax holiday for gas purchases.
David Brunori, a contributing editor for State Tax Notes and a research professor at The George Washington University, called the proposal "ridiculous" and "asinine."
"Rarely ever do people be so obvious with their pandering to the electorate," he said.
Brunori supports the Republican crusade against taxes on investments in Florida, but has criticized tax holidays because they don't generate more business.
"If you have a sales tax holiday on everything, you're not going to spend more, you're just going to change when people shop," he said.
He said similar proposals have never passed in other states "because everybody realizes just how ridiculous it is."
In a statement, business-supported Florida TaxWatch applauded the proposal, but cautioned that a more pressing need may be money to address the state's debt that has doubled to more than $22 billion in the past few years.
"By reducing long term debt, the state gives taxpayers a gift that keeps on giving by saving tens of millions of dollars in interest payments on that debt and reducing the legacy of debt by hundreds of millions of dollars to our children and their children," the statement said.
House Speaker Allen Bense's approval of the bill - the Panama City Republican said he has "an appetite for heavy tax cuts" - seems to insure its passage in the House. Senate President Tom Lee, R-Brandon, said the Senate would likely back tax cuts this year, although it is too early in budget process to endorse specific proposals. He said a sales tax holiday and the elimination of the intangibles tax on stocks and bonds were being discussed.
Lee, who is running for the state's chief financial officer position, said he liked the idea of using one-time cash to pay for a tax break, like a sales tax holiday, noting it wouldn't be a burden on future legislators or governors. He also said he liked the broad-based nature of the House's sales tax proposal, saying previous sales tax holiday that targeted school supplies didn't benefit consumers who didn't have children in school.
"To me, the broader it is, probably the more equitable it is for Floridians," he said.
House Democrats said the mega-holiday would give away too much of the state's revenue to tourists shopping in the state that week.
"I don't know what any one would have against visitors in Florida," countered Negron.
House Democratic leader Chris Smith, D-Fort Lauderdale, offered an alternative "instead of tax relief that benefits tourists more than Floridians, tax relief that requires people spend money before they get relief."
He and other Democrats are proposing a $100 payment to Florida homeowners that have the homestead exemption, ensuring it would go to those who consider Florida their primary residence. But renters would receive no benefit.
The plan would cost the state nearly $430 million, but wouldn't cost counties any lost revenue.
Rep. Dan Gelber, D-Miami Beach, said this alternative would help homeowners dealing with higher insurance premiums and hurricane readiness.
"They (Republicans) talk about tax breaks. This would be the first time they actually got a check from the state for tax relief," Gelber said, saying the sales tax holiday provides a smaller impact. "(Floridians are) not going to get 6 cents on the dollar they spend for pencils, they're going to get $100. They can buy all their school supplies in some places for that."
Democrats said they offered their proposal as an option to the Republican plan.
"I don't know if we want to call it a gimmick, but if it is it's certainly a better one," Gelber said.
Brunori criticized the Democratic plan, calling it an "inefficient way of providing tax relief" that would give millionaires and working class Floridians the same break.
Gov. Jeb Bush's spokesman, Russell Schweiss, said the governor supports tax cuts and "appreciates both proposals," but hasn't had the chance to review either plan in-depth.
Lloyd Dunkelberger of The Sun Tallahassee Bureau contributed to this story.

Reader comments posted to this article may be published in our print edition. All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged.

Comments are currently unavailable on this article

▲ Return to Top